Consumer inflation expectations moved down in August
In August, consumer inflation expectations lowered to 9.1%, to reach their minimum since the beginning of 2019. Companies’ price expectations and analysts’ forecasts also moved down slightly, reflecting the inflationary pressure decrease. This data is given in the Bank of Russia's new commentary ‘Inflation Expectations and Consumer Sentiment’.
However, the rate of inflation expected by the general public is still higher than in 2018 H1, which evidences that inflation risks persist.
Respondents’ perception of the increase in prices for certain products and services almost unchanged in August. As expected, a greater number of respondents referred to higher utility rates due to the indexation in July, while the growth of fruit and vegetable prices was mentioned to a lesser extent owing to the new crop supply.
Corporate price expectations for the next three months slightly lowered and generally remained at the level recorded in mid-2018. Expectations varied across industries in August. Mining and agricultural enterprises’ expectations increased, while the wholesale and retail trade industry, many manufacturing segments and utility companies showed a downward trend.
Analysts continued to gradually decrease their inflation forecasts for the end of December 2019. The expected level in July was
According to the Bank of Russia’s forecast, annual inflation will return to 4% in early 2020.