Price growth accelerates in April, driven by temporary factors
Annual inflation went up 0.6 pp to 3.1% in April. As in March, in the wake of lockdowns across Russian regions a temporary rise in demand for basic consumer goods sent consumer price growth higher. The ruble weakening also added to this growth. These findings are reported in Consumer Price Dynamics, an information and analytical commentary.
Price growth was led by cereals, pasta, lemons and essential non-food items, which drove the increase in annual growth paces for goods overall. Conversely, prices for services grew somewhat more slowly — as many commercial services were suspended and demand dropped for those still available. The Bank of Russia projects that pressures on food prices are set to weaken as lockdown measures are eased in the near future.
Moving forward, annual inflation is likely to rise given that the low prices recorded between summer and autumn 2019 no longer apply in calculations, among other reasons. At the same time, as short-term proinflationary factors peter out, price developments will be chiefly influenced by the disinflationary impact of dropping domestic and external demand linked to anti-epidemic restrictions. In the context of the current monetary policy stance, annual inflation is predicted to stand at