CBR says pause in declining inflation expectations confirms need to extend tight monetary conditions

MOSCOW. May 23 (Interfax) - The pause in declining inflation expectations in recent months confirms the need to retain tight monetary conditions for an extended period in order to return inflation to the target level, the Central Bank of Russia said in a commentary.

"A necessary condition to return inflation to the target level is further reduction in inflation expectations. Returning inflation to the target and further stabilizing it near 4% implies a more extended period of retaining tight monetary conditions in the economy than previously projected," the CBR said.

The CBR forecasts Russia's annual inflation to decelerate to 4.3%-4.8% in 2024 and return to 4% in 2025.

As previously reported, an InFOM survey has indicated that inflation expectations in Russia rose to 11.7% in May from 11% in April. Consequently, expectations in April returned to the levels of February (11.9%) and March 2024 (11.5%).

CBR monitoring data indicate that price expectations on the part of enterprises were generally unchanged for May 2024, remaining high.