Changes in food and services prices retain regional differences in October

Most Russian regions registered a rise in annual inflation in October, which ranged between 2.1% in Chukotka and 5.9% in the Republic of Komi. Nationwide, inflation averaged 4.0%. Notable regional differences remained in how prices for food and services change.

The increase of inflation occurred to a large extent on the back of countrywide factors, temporary in nature. These include a weaker ruble, a rise in global prices for Russian food exports and a drop in oil-bearing and sugar-beet crops. Muted demand worked to constrain price growth, as did expanding grain crops and animal husbandry produce alongside regulated prices in several market segments.

The weakening of the ruble led to a rise in annual price growth paces for non-food products in most regions of the Federation.

Annual food inflation in October edged upwards in most regions, with the Southern Federal District reporting maximum figures, driven by an accelerated increase in prices for sugar, vegetable oil and meat products.

Palpable regional differences also remained in the movements of prices for services. They were playing out under the impact of diverse temporary factors, i.e. restrictions on foreign travel, additional measures to regulate rates, demand fluctuations and a deteriorating epidemic situation. The majority of regions reported a slowdown in the annual increase of prices for services. In the Siberian Federal District, the rise in annual inflation in October was the smallest of all federal districts; this occurred in many ways thanks to the dynamics of airfare prices (promotional events to restore passenger traffic) and communication services (a drop in demand once restrictions were eased).

For further details of regional inflation developments, please refer to information and analytical materials on the Bank of Russia website.