Page 40 - RusRPTDec22

4.2 Inflation
Inflation in October is still high. Even with a slower rise in prices than in previous month, consumer prices were up by 13% y/y in October. Food prices were up by 12%, non-food goods by 13% and services by 11%.
The product categories that saw the largest increases were detergents and cleaning agents (up 32%), sugar (31%), insurance (30%), butter (22%) and grain products (21%). The inflation expectations of firms and households are high and have grown slightly since summer.
Further inflation prospects depend on the balance of risks, which in S-T is shifted towards disinflationary pressure, as saving rate is elevated amid high economic uncertainty. However, in M-T, inflationary factors may predominate if Russia faces further geopolitical escalation or the world economy slips into recession.
The CBR said at the October rate setting meeting it expects to finish out this year with 12-month inflation running in the range of 12‒13%. The inflation forecast for other years was unchanged. Inflation stabilises in the range of 5‒7% by the end of 2023 and returns to the CBR’s 4% inflation target in 2024 and 2025. The CBR expects its key rate to settle in the range of 4.5‒6.4% next year and 4.1‒4.8% in 2024.
40 RUSSIA Country Report December 2022 www.intellinews.com