Inflation rises in August as price pressures abate in non-food markets
Annual inflation was up to 6.68% in August, as a rise was seen in annual and monthly core measures (seasonally adjusted) of sustainable price growth. This is reported in the Bank of Russia information and analytical commentary Consumer Price Dynamics.
The impact of sustainable inflation drivers remains substantial, driven by high inflation expectations and limited opportunities for a rapid expansion in output once it is back on a balanced growth path.
Specifically, current growth rates of prices for meat products, household appliances and electronics accelerated. At the same time, car prices grew slower, and prices for construction materials significantly slower. There was a drop in overall monthly growth in prices for non-food goods excluding oil products, which may suggest decreasing input cost pressures on prices alongside more a moderate pace of demand expansion.
According to the Bank of Russia’s forecast, annual inflation will start to slow down in 2021 Q4, including due to the increasingly pronounced effect of rises in the key rate since this March. Given the current monetary policy stance, annual inflation will edge down to