28 Oct 2022 15:13

Russian Central Bank updates 2022 inflation forecast to 12%-13% amid sooner indexation of utilities

MOSCOW. Oct 28 (Interfax) - The Central Bank of Russia (CBR) has raised the lower boundary of the inflation-forecast range for 2022, and the regulator now expects inflation of 12%-13% in the baseline scenario instead of the previous 11%-13%, the CBR said in a press release following Friday's meeting of the regulator's board of directors.

The CBR's updated forecast, among other matters, accounts for the indexation of housing and communal services tariffs being moved from July 2023 to December 2022, the CBR said.

When accounting for current monetary policy, annual inflation should decrease to 5%-7% in 2023, return to 4% in 2024, and should be close to 4% going forward, according to the regulator.

Annual inflation has continued to decelerate gradually, namely, the annual growth rate in consumer prices fell to 13.7% in September from 14.3% in August, and had dropped to 12.9% as of October 21.

The monthly seasonally adjusted rate of price growth increased in September, partly owing to one-time tariff increases in insurance rates and the mobile device market. Monthly price rises also increased, though remained low, when excluding one-off factors. Operational data in October overall indicate ongoing low current inflationary pressure.

"Despite the current decline in annual inflation, the inflation expectations of households and businesses are at an elevated level and have grown slightly compared to the summer months. Inflation expectations of professional analysts for the medium term are anchored near 4%," the CBR notes.