Page 32 - RusRPTAug20

BCS forecast CPI rate to climb to 3.4% y/y in July and close to 4% by September-October. This does not provide the CBR any more space for new rate cuts: the key rate will likely remain unchanged at 4.5% through the year-end.
4.2.1​ CPI dynamics
In June, Russian inflation rose to 3.2% y/y from 3% in May. ​This was in line with our estimate. However, weekly inflation data shows that in the beginning of July inflationary pressures accelerated to 0.3% w/w, driven by the planned rise in communal tariffs. This pushed CPI to 3.3% y/y as of 6 July.
Gasoline, tobacco and cereals led the price growth. Last month, prices of non-food consumer goods rose by 0.3% y/y, with the largest increases recorded in gasoline and tobacco categories (both 0.8% m/m). Food on average became more expensive by 0.2% m/m; cereals were the absolute leader in price growth with a rate of 2.3% m/m. The cost of communal services increased by 0.1% m/m. Core inflation went up by 0.3% m/m and 2.9% y/y.
4.2.2​ PPI dynamics
Producer price index of inflation (PPI) grew again to -8.3% in June after falling to -14.1% in May after demand collapsed because of the coronacrisis.
32​ RUSSIA Country Report​ August 2020 ​ ​www.intellinews.com