Ruble devaluation leads to highest inflation for August at 0.4% since 2010 drought
MOSCOW. Sept 4 (Interfax) - Inflation in Russia in August this year was 0.4%, the Federal State Statistics Service (Rosstat) said on Friday.
Such a significant hike in prices for the month, when cheaper seasonal fruits and vegetables usually squeeze inflation to zero, and sometimes even brings deflation, was unexpected for independent economists and the Economic Development Ministry.
The inflation consensus forecast for August prepared by Interfax was equal to 0.2%. The Economic Development Ministry gave its forecast interval for August at 0.0 to 0.1%. Rosstat's weekly price monitoring (which is now based on a narrower basket of goods) showed that from August 1 to August 31, inflation was 0.3% in August.
The last time price growth accelerated as such in August was during the 'dry' summer of 2010, when inflation was 0.6%. Deflation in August 2011 was 0.2%, and in August of 2012 and 2013 inflation slowed to a minimum 0.1%, and even in August of 2014 when the food embargo was introduced, price increases accelerated only 0.2%.
As a result, annual inflation in August rose to 15.8% from 15.6% in July. In July the level of annual inflation was 15.3%, in May 15.8%, April 16.4%, March 16.9%, February 16.7%, and January it was 15%.
It is clear that the main factor which influenced the August inflation was the weakened ruble. It is also evident that this influence will only grow, and it is highly likely that the government and the Central Bank will 'confuse maps' to achieve price targets (in the neighborhood of 11%) for inflation for 2015. The consensus forecast prepared by Interfax at the end of August for inflation for 2015 had it at 12.3% and that was without the negative data by analysts for August.
In July inflation was 0.8% due to tariff indexes from July 1, it was 0.2% in June, 0.4% in May, 0.5% in April, 1.2% in March, 2.2% in February, and 3.9% in January.
As a whole, from January to August consumer prices rose 9.8% (5.6% for the same period last year), and for inflation to be kept within 11.5%, price increases for the remaining four months this year should not exceed the average for August of 0.4%, which, by looking at the statistics for previous years, looks to be unlikely.