Russia’s annual inflation rate fell to 6.6% in November, down from 7.7% in October, according to a commentary published by the Bank of Russia on December 12. The central bank said the decline was driven by easing food and energy prices, although underlying inflation pressures remain elevated. (chart)

“Seasonally adjusted monthly price growth slowed to 2.2% in annualised terms,” the Central Bank of Russia (CBR) noted. It attributed the deceleration to a drop in petrol prices and a lower-than-usual increase in the cost of fruit, vegetables, and eggs. Prices for sugar continued to decline.

Volatile components of the consumer basket, which had previously pushed inflation higher, contributed negatively to price growth in November.

“Gasoline prices declined after strong increases in previous months. Vegetables, fruits, and eggs increased less than usual in November,” the CBR said.

The central bank also reported a broad easing in core price pressures. “Measures of seasonally adjusted underlying inflation mostly went down in November,” it said. However, it cautioned that “average price increases over the three months (September to November) for most of these goods remained above 4%.”

Price growth for food products, particularly dairy and fish, moderated noticeably.

“Compared to the previous month, annual price increases for services and food products, including milk, cheese, butter, and fish products, have significantly decreased,” the bank said. Prices for fruit and vegetables were 2.0% lower than in November 2024.

Inflation for non-food products also slowed, contributing to the overall decline in headline inflation.

Despite the improvement, the Bank of Russia reiterated its commitment to maintaining a restrictive monetary policy. “The Bank of Russia will maintain monetary policy tight enough to return inflation to the target of close to 4%,” it said. Future rate decisions, it added, would depend on the “sustainability of the inflation slowdown and the dynamics of inflation expectations.”

According to its forecast published on October 24, the central bank expects annual inflation to decline to 4.0–5.0% in 2026 and remain at the 4% target level in 2027 and beyond.