Russians expect inflation to decline and living standards to rise further

Inflation expectations of households continued on a downward trend in March, as an inFOM survey commissioned by the Bank of Russia suggests. On the back of growing optimism, the respondents offered improved estimates of future production dynamics, living standards and employment.

The upturn in expectations is brought about by the stable slowdown in actual inflation which has closed in on the Bank of Russia’s 4% target. However, despite this progressive decrease, the inflation expectations of households are still considerably above the inflation target, forcing the Bank of Russia to pursue a moderately tight monetary policy.

The consumer confidence index grew in March after a surge in pessimism in February. Even though the respondents have not altered their estimates of financial standing over the past year, they expect it to improve in the future and display a more positive attitude towards large purchases.

The respondents’ attitude to savings has also improved. Those claiming to have savings have gained in number. The estimates of savings value have also increased. Depositing money with a bank continues to remain the best-regarded form of savings of all those proposed to the respondents.