Page 50 - RusRPTFeb24

Following a base effects-driven drop in spring/summer 2023, both headline and core inflation are rising again. Based on current month-to-month dynamics, headline inflation will likely reach double-digits again in H2 2024.
Both the CBR and the Kremlin remain deeply concerned about inflation’s effect on the upcoming presidential election. Although Deputy Chairman of the CBR Alexey Zabotki said that the Bank will likely maintain tight monetary policy “for a long time,” Putin reassured constituents that the high key rate was a “temporary phenomenon” during this week’s pre-election tour of the regions. Cost of living concerns are of particular interest to the President, who went on to discuss the sudden spike in egg prices. The price of chicken eggs increased by a whopping 61.35% in 2023 (the price of food products in general only went up by 8.86%). Egg prices continued to soar in December, leading to increasing unrest. In response, the Ministry of Economic Development suspended the import duty on eggs from “friendly countries” for the first six months of 2024, although the Russian Poultry Union warned that this is unlikely to bring prices down. Regardless, the government’s quick action on the issue suggests that addressing inflation remains a key issue for Putin ahead of the presidential election.
Inflationary expectations in Russia fell to 12.7% in January (even though the previous month saw inflation peak at 14.2%), according to a brief survey from InFOM, commissioned by the Central Bank. Inflation expectations among respondents who have savings fell from 12.2% in December to 11.2% in January. For citizens without savings, expectations dropped from 16.3% to 14.1%.
Weekly inflation between Jan. 16 and Jan. 22 slowed to 0.07% compared with 0.13% the previous week. Annual inflation also dropped from 7.4% to 7.28%. According to the State Statistics Service, prices for eggs (a politically sensitive topic in Russia) fell 1.4%.
50 RUSSIA Country Report February 2024 www.intellinews.com