Russia’s CPI is expected to grow 8.3-8.4 per cent in annual terms by the end of two months, says the government.
According to the Economic Development Minister, this month inflation will total around 0.9 percent, on par with the January figures.
Earlier, Alexey Ulyukayev was quoted as saying that inflation might escalate faster at $25 per barrel but nevertheless stay below 10 percent.
According to the Bank of Russia, the Russian consumer basket, similarly to that in other emerging economies, features a fairly large share of food products with prices demonstrating rather high volatility. Price fluctuations in the food market are largely determined by changes in supply, mainly due to the weather-dependent agricultural output, both domestic and global. With the high share of food products in the consumer basket, food price changes may impose substantial pressure on headline inflation.
“The Russian consumer basket is further distinguished by the fact that prices and tariffs for some of its goods and services, used in CPI compilation, are administered by the government,” says a background document on the website of the Russian Central Bank.
“The government regulates tariffs on utilities, certain passenger transport, and communication services and some other. Prices on tobacco products and alcoholic beverages are also dependent on government-established excise duties,” runs the paper.
“Consumer demand is met through both domestically produced and foreign goods and services. Although statistics on the rate of imports in CPI are unavailable, the share of imports in retail trade turnover (totalling about 44% over recent years) can serve as its approximation in respect of goods. The large part of imported products in the Russian consumer basket accounts for the significant impact of the ruble exchange rate dynamics on inflation,” according to the website.
Author: Mikhail Vesely