Page 48 - RusRPTNov21

(35%), milk and dairy products (34%) and eggs (33%), while more than 30% of respondents mentioned all these items.
Consumer sentiment soured after the recovery in September, with all components pointing to a worse performance this past year and gloomy expectations for the next.
The September surge in food prices affected assessments of past inflation and the outlooks for next month and next year. Going forward, a further uptick in inflation expectations could lead to higher food prices in October. As we mentioned previously and judging from the October survey results, more respondents see the current changes in food and gasoline prices, along with the ruble’s volatility, as determining their inflation expectations.
Russia’s Ministry of Economic Development has revised its YE21 CPI forecast upwards from 5.8% y/y to 7.4% y/y on October 12, according to Minister of Economic Development Maxim Reshetnikov. The main drivers of this spike in inflation are labour shortages that have affected harvests. The Russian government is set to take additional measures to ease price pressures and increase social support. We expect CBR to revise its inflation and policy outlook during its October meeting and raise the key rate another 50bps to 7.25%.
48 RUSSIA Country Report November 2021 www.intellinews.com