Annual inflation in Russia sped up to 4.9% in December 2020, driven by one-off factors and the low base effect, according to the Bank of Russia’s information and analytical commentary Consumer Price Dynamics. The Bank of Russia forecasts that annual inflation in the country will equal 3.5–4.0% in 2021.
Conversely, the monthly growth (seasonally adjusted) of consumer prices slightly decelerated. The rise in sugar and sunflower oil prices slowed down after the Government set respective caps. Non-food prices (not seasonally adjusted) increased less than in November as the impact of the earlier ruble’s weakening was diminishing gradually. However, there was a surge in tomato, cucumber and egg prices that tend to fluctuate widely.
One-off factors in individual food markets and exchange rate movements may put longer-lasting pressure on prices amid a rise in households’ and businesses’ inflation expectations. As their influence wanes, the growth of consumer prices will be slowing down. The Bank of Russia forecasts that given the monetary policy pursued, annual inflation will equal 3.5–4.0% in 2021 and will stay close to 4% further on.
