Inflation will stay close to target

Despite temporary increase in June, inflation will evolve in line with the path that ensures achievement of the 4% target by the end of 2017. These are the findings of the current issue of Talking Trends, the Bank of Russia’s Research and Forecasting Department bulletin.

In June consumer inflation grew to 4.4% YoY, as this was mainly driven by prices on fruits and vegetables. However, recent inflationary pressures are considered as temporary and under Bank of Russia’s monetary tight monetary policy should not create obstacles to achieving the 4% for inflation in 2017 and keeping price growth close to target over the medium term.

In the second quarter of 2017 the economy followed the path of moderate, but sustainable growth, despite temporary fluctuations in oil prices observed in June. Current growth is accompanied by strong recovery in domestic demand. Survey data also suggest positive and solid growth rates of industrial production in the upcoming months.

The views and recommendations expressed in the Bulletin are solely those of the authors and do not necessarily reflect the official position of the Bank of Russia.