Page 16 - Russia OUTLOOK 2022

• CPI
Russian inflation soared in 2021 to reach a five-year peak of 8.4% in October before starting to fall again slowly as the year drew to a close.
Inflation is expected to fall to an average of 4% in 2022 and end that year at 3.8% before falling again to 3.7% and 3.6% respectively the following year, according to Rosstat.
BCS GM forecast that inflation will peak at end-2021 and then decline to c5% by end-2022, still up from the CBR target level of 4%.
However, with inflation expectations amongst the population unanchored and persistent problems to supply chains inflation pressures remain stubbornly high, despite an aggressive tightening policy by the CBR which hiked rates by a full percentage point in December to bring the prime rate to 8.5%.
CBR governor Elvira Nabiullina has argued that high inflation is not a temporary phenomenon and the decade-long period of low inflation has ended and a new period of higher average inflation has arrived. Nevertheless, the CBR remains committed to bring inflation back down to its target rate of 4%.
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