Weekly inflation in Russia quickens to 0.2%, annual strays from target ahead of CB rate meeting
MOSCOW. April 26 (Interfax) - Russia had 0.2% inflation for the week of April 18-24, the Federal State Statistics Service (Rosstat) said.
This was the highest weekly inflation since the period January 1-9 - longer than the usual week due to the New Year and Christmas holidays - when prices rose 0.3%. Weekly inflation has been either zero or 0.1% since then. It was 0.1% for three straight weeks prior to the past week.
The price growth ahead of the Central Bank's next rate-setting meeting on April 28 can be put down to higher fruit and vegetable prices, which averaged up 2.4% in the week, including cabbage - 17.8%, onion - 9.1%, potatoes - 6.5%, carrots - 5% and tomatoes - 3%.
Inflation in March 2017 was 0.1%, the lowest for the month since records began in 1991, due to ruble appreciation at the beginning of the year. Inflation in annual terms declined to 4.3% in March from 4.6% in February, 5.0% in January and 5.4% in December.
Average daily price growth for the first 24 days of April was 0.017%, was above the March figure of 0.004%. Should this trend persist, inflation in April 2017 could be 0.5%, compared with 0.4% in April 2016.
Based on average daily figures for similar periods of April 2017 and April 2016, when price growth for 25 days was 0.020%, inflation in annual terms as of April 24 this year was around 4.2%, or higher than the 4.1% that Central Bank Governor Elvira Nabiullina estimated as of April 17, and 0.2 percentage points above the Central Bank's 4% target.
It should also be taken in to consideration that in April 2016 inflation for the month at 0.4% turned out lower than that 0.5% that weekly figures as of April 25 pointed to. So annual inflation at end-April this year could yet quicken, and might at best be level with March at 4.3% unless the monthly figure again proves to be lower than the weekly figures suggest.
Inflation was 0.4% in the first 24 days of April and 1.4% since the start of the year.
In the past week, prices rose 0.4% for pork and 0.2%-0.3% for sausages, frankfurters, butter, margarine, milk, biscuits, flour and vermicelli pasta.
Eggs fell 1.3% in price, and mutton, chickens, sunflower oil, buckwheat and millet went down 0.2-0.7%.
Gasoline prices went up 0.1% and diesel fuel was unchanged in price.
The Russian Central Bank's Board of Directors could discuss either a 25 or 50 basis point rate cut at its April 28 meeting, Central Bank Governor Elvira Nabiullina said on April 20. "A quicker reduction in inflation is opening up space for us to lower the key rate already in April. I even think that there could be a debate between lowering the rate by 25 or 50 basis points at the next meeting of the board of directors," she said.
The Central Bank's target for inflation is 4%. Right now inflation is very close to the CB's target. According to Nabiullina, inflation slowed to 4.1% on April 17, but now, a week later, it looks like inflation is drifting away from the target slightly and could well be even higher for the month as a whole.
The Central Bank lowered its key rate for the first time in six months in March, from 10% to 9.75% pa. The Central Bank said following the decision that rate might be lowered gradually during Q2-Q3.
The Economic Development Ministry now forecasts that inflation will slow to 3.8% in 2017. The Central Bank's Nabiullina has said inflation at the end of 2017 may be below the regulator's 4% target.
Analysts said in a consensus forecast for Interfax in late March-early April that they thought inflation for 2017 might slow to 4.2%.