Page 47 - RusRPTNov21

4.2 Inflation
In September, Russia’s inflation rate reached a new five-year high, putting further strain on the country’s economic recovery from the coronavirus epidemic.
Annual price increases were 7.4%, according to the Rosstat statistics agency on Wednesday, exceeding market forecasts and representing a substantial increase from the 6.7% inflation rate reported in August, Moscow Times writes.
That is the greatest amount of inflation in Russia since February 2016, when the nation was facing a severe economic crisis caused by a drop in oil prices and worldwide sanctions that caused the ruble’s value to plummet dramatically. Surging food costs — a sensitive political issue for the Kremlin after years of stagnating and declining real wages for Russian families — were once again the biggest contributor to inflation, with average food prices up 9.2% over the past year, according to Rosstat statistics.
October inflation expectations, as reported by inFOM for CBR, returned to growth. The assessment of past inflation rose to 16.3% y/y vs. 15.6% y/y in September and 16.5% y/y in both July and August. Expected inflation for the next 12 months climbed to 13.4% y/y in October vs. 12.3% y/y in September and 12.5% y/y in August. Price expectations returned to June and July levels. On a qualitative basis, the share of respondents who believe prices rose faster and should rise even more in the next month and next year continued to resemble July levels. Respondents noticed higher prices over the past two months for meat and poultry (48% of respondents), fruits and vegetables
47 RUSSIA Country Report November 2021 www.intellinews.com