Inflation in Russia could exceed July forecast of 6.5%-7% in 2024, 4%-4.5% expected in 2025 - CBR

MOSCOW. Sept 13 (Interfax) - Annual inflation in Russia is likely to exceed the July forecast range of 6.5%-7.0% by the end of 2024, the Central Bank said in a commentary to its key rate decision.

The Central Bank said that given the monetary policy stance, annual inflation would decline to 4.0%-4.5% in 2025 and stay close to 4% further on.

The Central Bank said that in August, the current seasonally adjusted price growth was 7.6% in annualized terms. The similar indicator of core inflation was 7.7% in annualized terms. These values were below the average levels of Q2 2024 but exceeded the average values of Q1 2024. According to the estimate as of September 9, annual inflation equaled 9.0% after 9.1% as of the end of August. Underlying inflationary pressures remain high overall and have not yet demonstrated downward trends.

Inflation expectations of households and businesses continued to rise. Analysts' short-term inflation expectations increased. Nevertheless, long-term inflation expectations calculated based on financial market instruments declined after the July decision on the key rate. In general, inflation expectations of economic agents remain elevated. This enhances the inertia of underlying inflation, the Central Bank said.