Central Bank of Russia says decline in annual inflation in July to be expected as utility tariff indexation moved, 'debt' will be returned in Oct
MOSCOW. Aug 17 (Interfax) - The slight decline in Russia's annual inflation from 6.02% in June to 5.98% in July is due to the postponement of the indexation of utilities tariffs, the Central Bank of Russia said.
"The postponement of utility tariff indexation in 2026 from July to October has had a substantial impact on the annual consumer prices index (in 2025, the tariffs were indexed in July), as a result of which the effect of last year's indexation is no longer part of the calculation," the CBR said in its analytical commentary Inflation in Russia, published on Monday.
This decreased annual inflation by 0.77 percentage points (pp) compared with that of June, the bank wrote. This "technical decline" was practically offset by an increase in annual price growth for other goods and services, primarily for petroleum products, vegetables and fruits, as well as meat produce, the regulator said.
"The indexation of utilities tariffs is expected to make a significant positive contribution to the acceleration of annual inflation in October," the bank wrote.
According to the CBR's commentary, the increase in gasoline and diesel prices had the most notable direct influence on current price growth in July, but the indirect effects of the fuel shock also began to be seen, as the delayed effect of higher transportation costs began to impact prices for a wide range of goods and services.
Another factor bringing about an acceleration in persistent inflation indicators was the depreciation of the exchange rate in June-July after it appreciated in April-May, the CBR said.
Overall, persistent inflation indicators rose by 1.5-2.4 pp month-on-month in July. The biggest growth was in indicators which exclude only a small number of goods and services, as well as those sensitive to changes in the growth of prices for components with a large weighting in the consumer basket, the CBR said.
As reported, inflation in Russia was at 0.54% in July, and Rosstat reported deflation of 0.06% in the first 10 days of August.
In January-July 2026, prices in Russia increased 4.75%, up from 4.36% in the same period of 2025.
In July, the CBR raised its forecast for inflation in Russia in 2026 to 6%-7% from the 4.5%-5.5% predicted in April. A consensus forecast of economists surveyed by Interfax in early August predicts inflation at 6.6% in 2026, up from the 5.7% they forecast in early July.
