Regional inflation rises on the back of recovering demand and rising costs
The majority of Russian regions recorded an increase in annual inflation in March, ranging from 1.95% in the Chukotka Autonomous Area to 8.97% in the Republic of Daghestan. Such dynamics were predominantly associated with factors characteristic of the whole country, i.e. recovery of demand and increased costs due to the rise in world prices, faster rise in the price of motor fuel, and disruptions in the supply of imported materials and components.
In contrast, the rise in food prices in March slowed down due to a decrease in the growth rate of prices for fruit and vegetables (cucumbers, tomatoes) after the end of the frosty period. At the same time, the growth in prices for meat products and eggs continued to pick up because of increased producers’ costs, as well as local outbreaks of bird flu and African swine fever. Amid the recovery of demand, prices for non-food products (clothing, footwear, household appliances) rose faster. In the services sector, the main role in the price growth acceleration was played by the recovery of demand in the sectors most severely hit by the pandemic — passenger transport (air travel) and foreign tourism.
Inflation sped up across all federal districts, excluding the North Caucasian FD. Here, the country-wide factors were traditionally more pronounced in the food markets, where the annual price growth slowed down. The rise in prices for vegetables (cucumbers, tomatoes) and fruit (bananas, apples), as well as eggs and sugar slowed down the most.
The greatest increase in inflation was recorded in the Far Eastern regions, where, in contrast to most federal districts, the annual growth of food prices (eggs, cucumbers, fish products) demonstrated a marked acceleration. At the same time, the slowdown in the dynamics of prices for tomatoes was less pronounced than in other regions.
More details on inflation in Russian regions are available in the information and analytical materials published on the Bank of Russia website.