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Russia’s growth model is exhausted, says Oreshkin
13 hours ago
Russia’s consumer price inflation in May 2025 stood at 0.4% month on month and 9.9% year on year, according to the latest data from RosStat statistics agency. (chart)
Notably, May’s inflation reading is higher than expected, as CPI was curbing away from 10% in the past weeks. Still, the latest weekly inflation data showed that price growth continued to slowly moderate.
As followed closely by bne IntelliNews, the board of the Central Bank of Russia (CBR) resolved to cut the key interest policy rate from 21% by 100 basis points to 20% at the policy meeting of June 6, the CBR said in a press release. (chart)
The key interest rate has stayed at a record-high 21% since October 2024.
Renaissance Capital attributed higher-than-expected inflation in May largely to the services sector, whose contribution to overall inflation increased significantly from April.
At the same time non-food goods prices continued to decline for the second consecutive month, supported by the strength of the ruble.
Analysts at Renaissance Capital believe that inflationary pressures remain moderate, but the outlook depends on several key variables. Impact of the scheduled utility tariff hike on July 1, as well as developments in the external geopolitical environment, are highlighted by the analysts.
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