Page 40 - RusRPTSept21

4.2 Inflation
In Russia, June statistics indicated that a recovery continued at somewhat softer pace than in previous months amid easing catch-up momentum and the spread of Delta. This provides less inflationary environment, before a prolonged pause and an easing starting mid-2022.
The weekly price growth printed at 0% w/w in the first week of August, and analysts expect inflation flat at 6.5% y/y in July (0.4% m/m which implies 3% seasonally adjusted annualized – below the 4% target for the first time in 10M).
The new harvest and falling prices for openfield vegetables made the main contribution to the deceleration of food inflation. Declining potato, beet and carrot prices (SA) partially offset their accelerated growth over the previous three months (Chart 6). The latter was related to the faster than usual exhaustion of domestic product stock due to the inadequate harvest volume and quality and, as a result, a larger market share of imported products. Current growth of prices for principal groups of food products excluding fruit and vegetables mainly slowed down. This points to a gradual exhaustion of the influence of rising costs largely driven by the fluctuations of global prices. Growth of producer prices of food products is also constrained by customs and tariffs regulation measures.
40 RUSSIA Country Report September 2021 www.intellinews.com