Improved assessment of current inflation by Russian households

Following a seasonal surge in January, households’ assessment of monthly inflation leveled down in February. According to the February inFOM survey commissioned by the Bank of Russia, the share of respondents believing that prices rose considerably over the past month dropped to its minimum observed since mid-2014.

When answering about goods and services whose prices showed the highest growth over the past month, respondents still tend to mention housing and utility services rather often. By contrast, the frequency of answers mentioning meat, poultry, fruit, vegetables, eggs, confectionary, sugar, oil and household electronic appliances fell noticeably. This means that prices for the mentioned goods have either dropped or have grown less than before.

Decline in the assessments of expected inflation suspended in February. Inflation expectations remain elevated and volatile, which implies the need for the Bank of Russia to preserve a moderately tight monetary policy.

Participant in the inFOM survey demonstrated slightly lower consumer sentiment in February compared with the surge of optimism in January. Respondents’ attitude toward large-value purchases became more negative, and the consumer sentiment index reversed to end-2016 values. However, despite the decline in the assessments of material situation, the share of respondents forced to abandon their spending plans went down.