Page 77 - RusRPTJul22

Russia's weekly CPI gauge remained flat between May 21 and 27. This meant that consumer prices were still up only 0.13% since the beginning of the month. We can therefore estimate inflation in May at 0.1-0.2% m/m, which is significantly lower than the 0.7% inflation registered last May and would bring the y/y inflation to 17.2-17.3% down from 17.8% at end-April.
In fact, inflation in May was abnormally low, because given the seasonality of price growth it should usually be running around 0.4% to meet the CBR's annual inflation target of 4%.
The decline in food prices continued and included not only fruits and vegetables, but also categories such as pork, poultry, eggs and sugar. The appreciation of the ruble and cooling consumer demand helped drive down prices on non-food items, especially on children's clothing, footwear, electronics and medicine. We expect inflation to remain at very low levels this summer.
The CPI rose 11.8% between January 1 and May 27, so it will probably be up 11.8-11.9% at end-May. We now see inflation over the full year at 14-16%. The upper end of this forecast (16%) implies an acceleration in annualised inflation (current seasonally adjusted inflation extrapolated 12 months ahead) to around 6% in 4Q22.
4.2.2 PPI dynamics
Producer prices in Russia increased 19.3 percent year-on-year in May of 2022, easing from a record high of 31.5 percent rise in the previous month. It was the
77 RUSSIA Country Report October 2020 www.intellinews.com