“Petrol” rally will cause inflation to rise ahead of
The may rally in gasoline prices in the country may give the annual inflation rate of additional growth to 0.4 percent, said the head of the Central Bank Elvira Nabiullina. According to her, inflation in the structure at the moment, there are factors that cause concern: for example, dynamics of fuel price, which in may were imitated by 11.8% yoy. the Chairman of the Bank of Russia believes that the increase in gasoline prices in the future will be the limiting factor in the performance of the CBR to contain inflation. And this factor will certainly be considered at the next meeting of the Central Bank, which will take place in the middle of the month.
Official views on the annual inflation rate is still not changed: the Ministry is waiting for the consumer price index at the end of 2018 at around 3%, the Central Bank of the Russian Federation predicts about 4%. It is likely that “diesel” contribution to inflation will be higher than it is now. Even if in the near future the growth of retail prices for fuel will cease acceleration and price tags stabiliziruemost, closer to the fall we are waiting for the second wave of rally of petrol and diesel due to seasonal demand factor.
Then, probably, the contribution of gasoline in annual inflation will amount to 1%. Let’s not forget that, traditionally, the increase in fuel prices brings with it an increase of the cost of any and all goods and services. Have already started to appreciate vegetables and fruits, despite the seasonal offer transportation services and transit-related goods services. A month later, on July 1, in Russia will be raised tariffs for services of natural monopolies. Monthly fee for housing for Russians will increase that will create additional load on the pocket of the consumer, and inflation in General.
At the same time, it is too early to say that the CBR lost the fight against inflation. It can flexibly work with key rate and change the terms of lending and auctions to provide liquidity in order to continue to regulate the consumer price index. While this still works, this must be used.
However, it is now clearly seen that the low inflation in Russia are local, temporary and an election story, so expect its recurrence at least in vain.