Russians note growth in savings as inflation expectations stabilise

Inflation expectations and observed inflation stopped to decline in June 2017, as suggested by a Bank of Russia-commissioned survey conducted by inFOM.  Also, respondents note growth in savings and better opportunities for longer-term expense planning.

A direct one year ahead estimate of expected inflation by inFOM was in June unchanged from its historical low in May. However, it is still well above the Bank of Russia’s target of 4%, which is, among other things, a reason for the continued moderately tight monetary policy.

Respondents’ consumer expectations were mixed in June.  The proportions of respondents expecting their financial status to improve or worsen next year came in equal as there were fewer pessimistic estimates. This is a marked improvement on the 2015–2016 data – when there were twice as many pessimists. Lowering uncertainty and the country’s improved economic outlook is also suggested by the growing share of respondents who feel able to forecast their family incomes for a longer term.

Consistent with expectations for summer months, respondents tend to mention major purchases of renovation and leisure travel more often; however they still prefer saving to spending. The survey found a better evaluation for a changing amount of savings - both for the past year and for the year ahead. Also increased was the proportion of those who believe their savings will last them longer.