Page 26 - RusRPTFeb20

increase in the prices of food products (mostly fruits and vegetables), while core inflation (which strips out the volatile prices of fruits and vegetables, gasoline and regulated tariffs) rose by 0.14% m/m, slowing from 0.22% m/m in November. Underlying inflation, which is a more preferable measure for the CBR, remained virtually unchanged at 0.2% m/m and at 2.3% in annualized terms.
Weekly inflation dynamics suggest 0.6% price growth in January although there was 0% inflation in the last two weeks. Price growth accelerated during the first week of January due to the traditional tariff indexation. However, it started to slow over January 10-13, moving more in line with the December dynamics. Prices ended up rising 0.4% during the first 13 days of the month. WIth no price growht in the last two weeks of January means annualised inflation will fall to 2.6%.
4.2.1​ CPI dynamics
Russia's consumer price inflation posted 0.4% month-on-month in December 2019, translating into a 2019 full-year CPI of 3% year-on-year versus 4.3% y/y seen in 2019, according to the preliminary estimates of the Rosstat statistics agency.
In December food inflation reached 0.7% m/m in and 2.6% for the full year, while non-food inflation reached a respective 0.1% and 3%. Services inflation came in at 0.2% m/m in December and 3.8% in 2019.
Uralsib Capital analysts on January 9 also noted that given the exhaustion of the high base effect, annual inflation is expected to moderate to 2.5-2.7% in January, while projecting the 2020 inflation at 3.3%. Sberbank CIB expects inflation slowing to 2.5% y/y by the end of 1Q20 before recovering slightly.
Inflation in Russia is expected to continue declining in Russia early this
26​ RUSSIA Country Report​ February 2020 ​ ​www.intellinews.com