Inflation expectations decline somewhat in February
Inflation expectations of households, businesses, and financial market participants dropped slightly in February 2019, notes the latest issue of ‘Inflation Expectations and Consumer Sentiment’, a Bank of Russia commentary.
Households’ inflation expectations lowered in February to 10.1% from the 10.4% registered in January 2019 and were once again below the inflation readings observed by respondents. In their estimates of future inflation, households are primarily guided by changes in prices of important items, such as food and petrol.
The price expectations of businesses dropped in February for the first time since 2018 Q2. That said, the balance of replies returned to the level registered last October. Expectations in the agricultural sector, construction and wholesale trade sectors demonstrated the most considerable drop, whereas retail trade and services saw the least tangible decline.
The inflation expectations of financial market participants (for four and nine years ahead) declined somewhat yet remain elevated relative to the Bank of Russia inflation target. The year-end inflation range forecast by experts in January-February 2019 narrowed slightly to