Economy: Annual inflation in Russia increased to 2.5%

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And again…inflation In July, according to recent data of Rosstat, in Russia, at first glance, start to slow, increasing by only 0.3%. Recall that in June on a monthly basis, the consumer price index rose significantly more, by 0.5% and in may to the April inflation increased by 0.4%, so that July growth was the lowest for three months.
However, with annual inflation in Russia are not so great. In July, it increased from 2.3% to 2.5% by July 2017 and beginning of 2018, the inflation rate also increased from 2.3% to 2.4%. Mostly annual basis, prices for non-food goods and services (growth of 3.8% in each group).
This is logical, given that the price of gasoline has increased by more than 11% compared to July 2017. In July, gasoline prices have stagnated and even, as estimated by Rosstat, decreased by 0.2%. However, since the beginning of year gasoline has risen in price by 9.2% due to a sharp rise in prices in may and early June.
It should be noted that from non-food items for the month rose almost everything, including clothes and shoes, as well as strong price growth (0.8% in July, above the monthly inflation rate) was observed on tobacco products (whether it stimulates smokers to switch to a healthy lifestyle – yet an open question). The rise in food inflation in July was 0.5%, which is 0.1 percentage point above the June price increases.
And foodstuffs excluding fruit and vegetables rose in July by 0.3% in comparison with the price growth of 0.4% in June. However, no food deflation in July was not observed, as in June, it seems that this year forgot about it. Such situation became a consequence of an increase in gasoline prices in previous months, prices of consumer goods respond to the increase in fuel prices with a certain interval.
In August, most likely, almost forgotten food deflation will manifest itself, which can slow the overall rate of inflation for August, but is unlikely to have a major impact on annual inflation. Perhaps the August deflation will affect the price growth for the year will not exceed the government’s forecast and CBR of 4% per year.
Natalia Milchakova,
The Deputy Director of analytical Department,