CBR expects Russia's annual inflation to decline to 10.1% by end of June

MOSCOW. May 12 (Interfax) - The Central Bank of Russia expects annual inflation in the country to decrease to 10.1% by the end of Q2 2025, according to the Central Bank's commentary accompanying its medium-term macroeconomic review.

At the end of Q1 2025, annual inflation stood at 10.3%, coming in below the Central Bank's February forecast (10.6%).

"Current price growth in Q1 2025 slowed significantly compared to peak levels at the end of 2024, influenced by tight monetary policy and the ruble's strengthening, reaching an 8.3% seasonally adjusted annual rate (SAAR)," the Central Bank said. It expects this indicator to reach 7.0% SAAR in Q2.

"A further slowdown is projected in the second half of the year (except for July due to planned utility fee indexation). By the end of 2025, current price growth rates will decline to 4% SAAR," it said.

Following its board meeting in April, the CBR maintained its year-end 2025 annual inflation forecast at 7.0%-8.0%. The Central Bank's baseline forecast assumes that, given current monetary policy and as the economy returns to a balanced growth trajectory, annual inflation will reach the 4% target in 2026 and stabilize at this level thereafter.