Inflation up in May
Current price growth substantially accelerated in May. Inflation was significantly fuelled by the increase in prices for tourism and passenger transport services that are characterised by elevated volatility. However, the rise in prices for underlying components of inflation sped up vs April surpassing the rates of 2023 Q4 on certain indicators. Annual inflation increased to 8.3%.
The major proinflationary factor was high domestic demand. Its level continued to exceed companies’ capacities to expand output. The monetary policy pursued will limit soaring domestic demand and dampen its proinflationary consequences. To slow down inflation, it will be necessary to maintain tight monetary conditions for a significantly longer period than it was forecast in April.
More details are available in the new issue of the Bank of Russia’s information and analytical commentary Consumer Price Dynamics.