Prices grow rather modestly in May
Headline price growth was low in April–May, which was largely associated with a considerable decline in prices for a number of products with volatile price dynamics (fruit and vegetables).
Prices for products that are mostly affected by demand rather than by transitory factors were rising moderately on average or even declining in May. That was attributable to the ruble appreciation, among other things. Prices for imported used cars, as well as perfumes and cosmetics decreased. Additionally, prices for washing and cleaning products, electrical goods and household appliances, communication devices, TV and radio goods, tools and equipment continued to go down.
Contrastingly, prices for services were still rising fast. In contrast to non-food goods, households have limited ability to postpone their consumption of many services, e.g. educational, medical, and personal services. Furthermore, the demand for services continues to exceed the capacities to ramp up supply as staff shortages persist. Consequently, service prices are still increasing quickly.
The Bank of Russia will continue to implement its monetary policy to achieve sustainably low inflation. More details are available in the new issue of the information and analytical commentary Inflation in Russia.