Page 31 - RusRPTJun19

4.2.1 CPI dynamics
Weekly CPI remained at 0.1% as of 20 May, for the sixth week in a row, pushing the annual estimate further down to 5.1% y/y, according to Rosstat. The daily average price growth in May 2019 remains lower than in May 2018 (0.009% vs 0.013%). Recently, the CBR announced that it could adjust its CPI forecast downwards. Despite these positive developments, we think that the CBR will keep the key rate unchanged at its June meeting given expected temporary inflation spike in July and some deterioration of external conditions (US-China trade dispute).
4.2.2 PPI dynamics
Producer prices in Russia increased 10.7% year-on-year in April of 2019,
easing from a 10.9% rise in the previous month. Cost slowed for manufacturing (6.7% from 7.4% in March), particularly coke & petroleum products (7.4% from 10.2%) and chemicals & chemical products (8.6% from 8.8%). On the other hand, prices advanced faster for electricity, gas, steam & air conditioning (5.8% from 4.9%); water supply, sewerage, waste management & remediation activities (4.5%) and mining & quarrying (25.2% from 24.4%), namely crude oil & natural gas production (33.1% from 31%). On a monthly basis, producer prices went up 0.5%, following a 0.9% gain in March.
31 RUSSIA Country Report June 2019 www.intellinews.com