Inflation expected by Russian households for the next 12 months did not change in the last month and remain elevated, according to according to InFOM’s survey, commissioned by the Central Bank of Russia (CBR). (chart)

Despite the rapid fall in inflation rates in the last month to 9.2% in July, the population are expecting inflation to rise to 13%, InFOM reports. However, while inflation expectations increased among respondents with savings they edged down among those without savings.

InFOM found that Russians are watching money supply growth and paying less attention to the CBR comments. The analysis finds that only the money‑supply treatment significantly shifted expectations.

Respondents shown that broad money grew by around 20 per cent revised their expected inflation upward—raising the average expected rate by 0.93 percentage points, from 15.70 per cent in the control group to 16.63 per cent among those treated, according to the CBR.

By contrast, information about past inflation or the central bank’s targets—whether nominal or accompanied by target‑achievement—did not meaningfully alter household forecasts. Nor did providing the population’s nFOM inflation expectations produce widespread impact.

Authors note that traditional central‑bank communication appears ineffective among households. In particular, low trust in official messages, combined with distrust of low inflation figures they do not observe in daily life, may explain why treatment information on the inflation target or past inflation failed to move expectations. Many respondents, especially those with low financial literacy, may misunderstand or mistrust the central bank’s narrative.

The CBR’s non-monetary policy methods to slow the economy appear to be working and inflation has been falling faster than expected, CBR governor Elvia Nabiullina said at a press conference last week. The CBR is forecasting that inflation will fall to around 6-7% by the end of this year, revised down from an earlier projection of 7-8%.