Page 30 - RUSRptApr17

registered 4 .3% year-on-year in March 2017 , down from 4.6% seen in February and 5% in January.
4.2.1 CPI dynamics
Inflation declined to 4.3% y/y in March, from 4.6% y/y a month earlier,
according to Rosstat, and the current rate of inflation stood at 0.1% MoM. The release exactly matched the Bloomberg-compiled consensus and our estimates. Adjusted for seasonal variations, average consumer prices stayed unchanged in March, with all major categories printing lower than the target-consistent 0.33% m/m SA.
Inflation in food items declined to 3.5% y/y. It had been at 3.7% in February, so the drop shaved 0.1pp off the headline price growth. The main supporting effect to disinflation came from meat items, which slid to 1.9% y/y, from 2.9% y/y in February. Sugar prices continued to decelerate as well, printing -18.0% y/y, from -16.2% y/y in February. However, these contributions were partly offset by the more moderate decline in the fruit & vegetables category, which was down -7.6% y/y (vs. -9.0% y/y the month before). Otherwise, the most pronounced price growth was still in the oil & fats category, which increased 13.8% y/y, on the back of the rise in global prices.
Non-food price growth declined even more visibly. It was down from 5.7% y/y in February, to 5.1% y/y. The improvement mainly came on the back of the lesser price growth in passenger cars, which was at 4.5% y/y in March, compared with 5.5% y/y in February. Other FX-linked items also faced more moderate price growth (2.0% y/y vs. 3.1% y/y in electrical devices) or declined faster than before (-2.6% y/y in computers, vs. -2.2%). We note that in March, $RUB appreciated 17.5% y/y and 0.5% MoM.
On the services front, inflation stayed almost unchanged. In March, it was reported at 4.2% y/y, after 4.3% y/y in February. A major improvement was
30 RUSSIA Country Report April 2017 www.intellinews.com