Pass-through of temporary factors into inflation should last until mid-2026 - Central Bank Governor Nabiullina

MOSCOW. Oct 24 (Interfax) - The pass-through of temporary factors into inflation should continue until mid-2026, Central Bank of Russia Governor Elvira Nabiullina said on Friday at a press conference.

Nabiullina said that the current rate of inflation accelerated in September primarily owing to the dynamics of gasoline and fruit and vegetable prices. Changes in the seasonality of fruit and vegetable prices, with an unusually early and pronounced decline in prices in the summer followed by a return to growth in the autumn, as well as tensions in the fuel market, are temporary pro-inflationary factors, she said.

"However, even if we remove these and other temporary factors from inflation, its sustainable indicators are still above 4%. There is no clear downward trend. Most sustainable inflation indicators have been within the 4%-6% range for several months. Inflation expectations remain high. Businesses' price expectations actually rose in October after remaining virtually unchanged for several months, and this increase was primarily in trade. Companies attribute the rise in their estimates, among other factors, to the upcoming tax increase," Nabiullina said.

"Households' inflation expectations were unchanged in October. The updated forecast raises the inflation estimate to 4%-5% for next year, with the revision owing to temporary inflationary factors, namely the situation in the fuel market, tax increases, and the faster indexation of utility rates. We estimate that the pass-through of these factors into prices should continue until the middle of next year. Sustainable inflation should reach 4% in the second half of 2026, with annual inflation remaining on target in 2027 and going forward," Nabiullina said.