The trend for a recoilless acceleration of inflation, which has continued in Russia since spring, has stalled, Rosstat said on Thursday.
For the week from 13 to 19 July, the consumer price index showed a symbolic decline – by 0.01%.
This year’s first weekly deflation reduced the annual price increase to 6.5% from 6.56% a week earlier, the Ministry of Economic Development said in an operational commentary.
The new harvest has begun to bring down the temperature in the food market, where inflation has accelerated to six-year highs.
Prices for carrots, which jumped 151% since the beginning of the year, fell 3.79% over the week. After taking off 80%, potatoes became 6.21% cheaper.
Cucumbers and tomatoes fell in price by 5.4% over the week and are, according to Rosstat, cheaper than at the beginning of the year, by 42.8% and 28.7%, respectively.
However, at the same time, the growth in prices for pork (+ 10% since the beginning of the year), chicken (+ 18.9%) and beef (7.9%) accelerated. Buckwheat (+ 15.2% YTD), bread (+ 7.5%), flour (+ 8.6%), sunflower oil (+ 27.7%) and fish (+ 14.5%) continued to rise in price …
Non-food inflation – 7.59% yoy – meanwhile, almost caught up with the food inflation against the background of a rapid rise in prices for building materials, which became more expensive by another 2.6% per week.
The focus on slowing inflation, which ranks first among Russians’ concerns ahead of the Duma elections, was set by President Vladimir Putin in June.
During the St. Petersburg International Economic Forum, he expressed the hope that by the end of the year the rate of price growth would be reduced to 5%.
“Somewhere around 5%, it would be nice to have a little less (so that) there would be inflation in 2021,” Putin said.
The President heard the signal at the Ministry of Economic Development and, after complex modeling and calculations, predicted inflation exactly at the level that Putin named. Later, the target figure of 5% was confirmed by First Deputy Prime Minister Andrei Belousov.
In order to fulfill this plan by December, the average monthly rise in prices must be slowed down by more than three times, the economist of the Bank Tsentrokredit Yevgeny Suvorov calculated.
So far, inflationary pressure is growing through several channels at once: world food prices have increased by 40%, imports have risen in price by 15%, container shipping has risen by 20%, says Natalia Orlova, chief economist of Alfa-Bank. If inflation can be slowed down, then quite a bit – up to 6.2%, she is skeptical.
The Baltic Dry Index, which reflects the freight cost of bulk vessels, has set records in the summer since 2010, while container shipping is the most expensive in history at $ 13,000 for a 40-foot container on the Shanghai-Rotterdam route.
All this promises a new wave of price increases for imported goods this fall, PSB analysts warn. New price tags will delight consumers with imported equipment and clothing stores.