Temporary factors send inflation expectations higher in April
In April, inflation expectations of households went up and those of businesses remained steady and elevated, according to ‘Inflation Expectations and Consumer Sentiment’, an information and analytical review. Among key reasons behind the growth are temporary factors including sliding oil prices.
Due to the anti-pandemic measures in place, the April inflation expectations survey of households was conducted remotely — via telephone. Its results are not comparable to those of regular surveys. The absolute majority of respondents (75%) think that the current growth pace has accelerated from the January to February period. Respondents note that price growth was led by long life products (cereals, sugar and pasta). The observation is aligned with Rosstat data showing accelerated price growth in these product categories dates back to March. Also, respondents often mention rising prices for fruit and vegetables. This may be explained by, beyond seasonal price movements, costlier imports.
According to an industrial survey the Bank of Russia conducted last April, companies’ price expectations changed little if at all but remained high. Expectations put in mixed performance across sectors. Weak domestic and external demand pushed price expectations lower in the mining, agricultural, transport and other services sectors. At the same time, the weaker rouble drove price expectations of industrial enterprises and wholesale and retail companies higher, with the strongest rise seen in retail.
The Bank of Russia forecasts inflation at