CBR expects slowdown in seasonally adjusted inflation in Q4 to 6.5%-8.5% from 11.1% in Q3

MOSCOW. Nov 6 (Interfax) - The Central Bank of Russia expects seasonally adjusted inflation to slow year-on-year in Q4 to 6.5%-8.5% from 11.1% in Q3, 8.7% in Q2 and 5.9% in Q1, the CBR said in its medium-term macroeconomic outlook.

"According to the Central Bank's updated forecast, current price growth in Q4 2024 may be 6.5%-8.5% [taking into account seasonal adjustments in annual terms]," the bank said.

In October, the CBR raised its forecast for inflation from 6.5%-7% to 8%-8.5% in 2024 and from 4%-4.5% to 4.5%-5% in 2025. "The review of the forecast is due to stronger and more persistent inflationary pressure, as well as consideration of specific measures related to the increase in regulated tariffs and prices and budget adjustments. At the same time, monetary policy which is tighter than was anticipated in July will create the necessary conditions for bringing annual inflation back to 4% in the first half of 2026. Taking into account current monetary policy, annual inflation will reach 4% in 2026 and remain at the target level thereafter," the CBR said.

Core annual inflation when seasonally adjusted rose to 9.1% in September, up from 6.1% in July and 7.7% in August. This is close to the peak levels at the beginning of 2024, the bank said. Other figures for current price growth, adjusted for volatile components and one-time factors, were in the range of 6%-9%, annualized and seasonally adjusted, in Q3 2024. "This reflects a persistently high positive production gap that continues to exert upward pressure on prices. High and sustained inflation is also reinforced by growing inflation expectations among households and businesses, which reached their highest levels since the beginning of 2024 in October," it said.