Talking Trends: faster demand expansion leads to more persistent price growth
High-frequency indicators and survey results suggest that the growth rate of the Russian economy remained elevated at the end of the second quarter as a result of increasing consumer and investment activity. This expansion is driven by a steady rise in lending and households’ gradual shift from savings towards higher consumption, as well as still high public demand.
The seasonally adjusted growth rate of consumer prices is becoming increasingly more persistent, stabilising above 4% in annualised terms. Amid the significant expansion of demand, manufacturers are passing through their higher costs to prices more actively. A possible rise in inflation expectations following the ruble weakening might become another proinflationary factor.
More details are available in the new issue of the macroeconomic bulletin Talking Trends.