Consumer price growth in December accelerated to reach double-digit values, hitting 11.4% y/y and 2.6% m/m vs. 9.1% y/y and 1.3% m/m seen in November, according to preliminary data by RosStat. The acceleration in price growth in December was faster than anticipated, as headline inflation was expected to approach 10% in Q1/15 by both officials and analysts. RosStat is going to provide full data on January 12.
While previously inflation was expected to moderate in July, Russia's food embargo and a spin in geopolitical tension seen in August-September, have worsened the outlook on price growth. Inflationary expectations spiked in October-December as the ruble tracked global oil prices, sinking by 30%-40%.
In December, according to preliminary data, food prices continued growing, increasing by 15.4% y/y and 3.3% m/m. The pace of price growth in the service sector also accelerated notably to 10.5% y/y and 2.2% m/m.
While the Central Bank of Russia’s mid-term inflation target is 4%-5%, the forecast for 2014 has been revised upwards from 6% to over 7%, to over 8.5%. Most recently the CBR officials admitted that annual inflation is going to approach 10% in the end of 2014 and beginning of 2015.
|
CPI inflation, y/y |
Dec-08 |
Dec-09 |
Dec-10 |
Dec-11 |
Dec-12 |
Dec-13 |
Jan-14 |
Dec-14 |
|
TOTAL |
13.3% |
8.8% |
8.8% |
6.1% |
6.6% |
6.5% |
6.1% |
11.4% |
|
Food |
16.5% |
6.1% |
12.9% |
3.9% |
7.5% |
7.3% |
6.5% |
15.4% |
|
Non-food |
8.0% |
9.7% |
5.0% |
6.7% |
5.2% |
4.5% |
6.5% |
8.1% |
|
Services |
15.9% |
11.6% |
8.1% |
8.7% |
7.3% |
8.0% |
7.8% |
10.5% |
|
Source: RosStat |
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