Page 34 - RusRPTOct21

Inflation expectations remain strong.
In September, inflationary expectations stopped growing,but remained elevated.
According to a polly FOM, inflationary expectations of the population for the year ahead slightly decreased,but remained close to multi-year highs.
Short term pricing expectations of enterprises also slightly decreased,but were still at an increased level, according to the results of monitoring carried out by the bank of Russia.
Expected inflation for the next two years, included in the prices of OFZ-IN, changed slightly in September and remained close to the goal of the bank of Russia.
Professional analysts' inflation forecasts for 2021 almost did not change and were in the range of 5.8-6.0%, for 2022 and 2023 remaining close to 4%.
According to the bank of Russia forecast, annual inflation willegin to slow down in the fourth quarter of 2021.
Taking into account the current monetary policy, annual inflation will decrease up to 4.0-4.5% in 2022 and in the future will be close to 4%.
4.2.2 PPI dynamics
Russian producer prices rose +1.5% m/m / +28.6% y/y in August, in line with the bloomberg consensus.
Both the annual and the seasonally adjusted monthly growth numbers continue to be driven predominantly petroleum products and metals.
This time, the seasonally adjusted momentum slowed (to +1.1% m/m SA, from +3.1% m/m SA previously): metals within manufacturing decelerated to 3.2% m/m SA from the prior +4.5% m/m SA, pulling the headline PPI momentum down.
The run rate in consumer oriented producer prices was mixed in August: food accelerated to +1.0% m/m SA from 0.1% m/m SA, textiles slowed to +0.3% m/m SA from +1.2% m/m SA, vehicles decelerated to +0.7% m/m SA from +1.4% m/m SA, the momentum in construction materials prices remained level with July at +2.5% m/m SA.
Although the PPI run rate in food picked up, it remainedelow all of the October 2020 – May 2021 values; furthermore, the 3month moving average momentum was visibly lower than in 1H21.
34 RUSSIA Country Report October 2021 www.intellinews.com