Inflation expectations primarily drop in January
Household inflation expectations dropped to 8.3% in early 2020 (from 9.0% in December), according to the Bank of Russia’s commentary Inflation Expectations and Consumer Sentiment. This trend indicates that the rise in the previous month was of a one-off nature.
The estimate of the observed headline inflation maintains the downward trend that formed last year, which is in line with Rosstat’s data on price movements. In addition, respondents more often mentioned solely seasonal rises in prices for eggs, alcohol, tea and coffee, cheese and sausages, fruit and vegetables, as well as for passenger transport.
Businesses’ short-term price expectations remain close to the readings of 2019 H2. As in the previous months, business representatives noted that weak demand and high competition were the major drags on price growth.
Analysts’ forecasts for 2020 continued to lower. Expectations for returns on financial market instruments also stabilised at a low level.