Page 49 - bneIntelliNews monthly country report Russia May 2024

4.2 Inflation
The stabilisation in Russian inflation at 7.7% y/y in March was in line with expectations and adds to evidence that inflation pressures have continued to cool in recent months. The month-on-month increase of 0.4% was the softest in eight months. Food inflation remained at 8.1% y/y while non-food goods inflation edged up from 6.6% y/y to 6.7%. Services inflation ticked down from 8.5% to 8.3%. Our estimate of seasonally-adjusted core inflation eased to around 7.0% in three-month annualised terms, the weakest pace since August.
We doubt there’s enough in the inflation figures to give the central bank full confidence at this stage about the disinflationary trends taking shape in the economy. But inflation has clearly moved in the central bank’s favour and policymakers are likely to have become more convinced that the headline inflation rate is unlikely to rise much further, if at all, in the second quarter. Central bank governor Nabiullina has struck a hawkish tone this year but has given hints that interest rate cuts may be on the cards before long. We think the central bank will start an easing cycle at its meeting in July.
Weekly inflation slowed from 0.16% to 0.12% between April 9-15,
according to the economy ministry. At the same time, annual inflation accelerated from 7.79% to 7.83%. Food prices were up 0.1% in the week. Prices for gasoline and diesel fuel continued to rise (up 0.3% and 0.2% respectively) and tickets for domestic flights increased the most in the basket, up 3.92%.
49 RUSSIA Country Report May 2024 www.intellinews.com