Page 43 - RusRPTSept21

4.2.1 CPI dynamics
In July 2021, annual inflation decreased by 0.04 pp to 6.46%. The main restraining influence was exerted by a significant decline of volatile components, i.e. growth rates of fruit and vegetables and foreign travel. At the same time, annual growth rates of prices for non-food goods and food products excluding fruit and vegetables continued to rise. Monthly growth of prices for non-food goods (seasonally adjusted) stays at five-year highs, mainly under the influence of growing demand and producer costs related, among other things, to the accelerated growth of prices in global markets. Current indicators of sustainable price movements remain elevated. According to the Bank of Russia’s forecast, annual inflation will reach 5.7–6.2% in 2021. Given the monetary policy stance, annual inflation will edge down to 4.0–4.5% in 2022 and will remain close to 4% further on.
Inflation expectations: Despite a string of rate hikes and administrative measures designed to reign in rampant food prices inflation, the expectations of the population for price rises continue to grow.
Russians observed a median inflation rate from the last 12 months of 16.5% in August, up from 14.9% in June and Russians with no savings saw a rate of
43 RUSSIA Country Report September 2021 www.intellinews.com