Page 125 - RusRPTJul24

according to the press release.
Meanwhile maintaining large-scale government subsidized programs may slow the return to more moderate lending growth rates. Disinflationary risks are primarily related to a faster slowdown in domestic demand than expected in the baseline scenario, the regulator said. According to its forecast and given the monetary policy stance, annual inflation will return to the target in 2025 and stabilize close to 4% further on. That said, the current price growth rate has stopped decreasing and remains close to the levels of 2024 Q1. In April, the current seasonally adjusted price growth equaled 5.8% in annualized terms after 5.7% (on average) in 2024 Q1. Seasonally adjusted core inflation rose to 8.3% in annualised terms from 7.1% (on average) in 2024 Q1. Concurrently, one-off factors related to the indexation of tariffs on communications services and an increase in prices for domestic cars also contributed to price growth in April-May. According to the estimate as of June 3, annual inflation stood at 8.1% after 7.8% at the end of April.
The Russian economy still shows a significant upward deviation from a balanced growth path, the regulator noted.
Consumer activity remains high amid a significant increase in households’ incomes and positive consumer sentiment. According to companies’ surveys, investment demand remains high. Labor shortages come as the key constraint on the expansion of output of goods and services. Labor market tightness continues to grow. Unemployment has dropped to a new historical low.
125 RUSSIA Country Report July 2024 www.intellinews.com