Russia's annual inflation goes single digit as of February 1

By bne IntelliNews February 4, 2016

Russia's weekly inflation remained stable at 0.2% w/w on the week to February 1, bringing annual inflation rate to below 10% in the first month of 2016, according to estimates based on  data release of the Rosstat state statistics office on February 3.

The Central Bank of Russia (CBR) issued a hawkish statement the previous week warning that the monetary easing of 2015 could be rolled back if renewed oil price and ruble volatility compromise planned inflation curbing. Meanwhile, inflation has become the fastest growing concern for Russians.

Using Rosstat data, Gazprombank analysts on February 4 estimated that the 12-month average CPI has slowed to 9.5% y/y, while Sberbank CIB said annual inflation stood at 9.9% as of February 1.

Both estimates are in line with the recent forecast of the Economy Ministry that inflation will moderate to below 10% in January.

"The key rate [of 11%] is now above the current inflation rate for the first time since January last year," Gazprombank noted in its comments. However, the deceleration of inflation is mainly attributable to the base effect, which will fade away by the end of the first quarter, it warned.

The exhaustion of the positive base effect and lagged ruble devaluation effect could trigger a short-term spike in inflation in the second quarter, the bank forecasts, seeing CPI likely rising 1pp from 9.3% y/y to 10.3% y/y in April-June.

Sberbank CIB models a scenario in which February's m/m inflation will remain close to January's 0.9% m/m as reported by Rosstat. This would push inflation down to 8.6% y/y in February, making the annual inflation forecast of under 9% realistic. (The Economy Ministry currently forecasts 8.5% y/y inflation in 2016).

"The most crucial factor for disinflation, however, is the stability of the oil price, as the CBR has already found the optimal approach to monetary policy and has reduced FX volatility," the investment arm of Russia's largest bank stresses.

Related Articles

Opec prolong output cuts by nine months

Opec member countries reached an agreement to cap oil output for another nine months until March 2018, Bloomberg and the Financial Times reported on May 25, citing unnamed sources close to the ... more

RBI doubles net profit y/y in Q1 as Russian business recovers

Raiffeisen Bank International (RBI), the second largest bank operating across Central and Eastern Europe by assets, reported that net profit almost doubled year-on-year to €220mn in the first ... more

Russia’s biggest bank fraud lands ex-CEO in jail for nine years

The former CEO of Russia’s Vneshprombank Larisa Markus has been sentenced to nine years in jail by a Moscow court for extracting about RUB113.5bn (EUR1.83bn), in what has become the ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss