Russia's annual inflation rises to 3.4% by early July, unlikely to exceed 5% by end of year - PM Mishustin

MOSCOW. July 5 (Interfax) - Annual inflation in Russia in late June to early July continued to grow amid the low baseline for the same period in 2022, though it is unlikely to exceed 5% by the end of the year, Prime Minister Mikhail Mishustin said in a statement.

According to the latest available data from the Federal State Statistics Service (Rosstat), annual inflation was 3.2% as on June 26, having added 0.2 percentage points over the week, as had been expected because of the baseline effect. Following the spring surge in consumer prices, the trend had reversed by the summer of 2022, with deflation of 0.35% deflation recorded last June. The indicator continues to rise in annual terms, Mishustin said at a meeting with President Vladimir Putin.

"Regarding inflation, you are well aware of the numbers; at the beginning of July, it was 3.4%," Mishustin said.

"According to all the experts, it should not exceed 5% year-on-year. We will keep our eye on it," Mishustin added.

Mishustin said that the government has created a special system for monitoring prices, concerning primarily the so-called consumer basket.

"Let us say that on my desk every morning, there are all pricing areas that are sensitive to citizens. There is information from three or four sources, from Rosstat, the tax service, and our respective analytical centers. We are keeping an eye on this very closely and attentively," Mishustin said.

Annual inflation forecast at 5% is in the lower range of April's estimated annual inflation of 4.5%-6.5% of the Central Bank of Russia (CBR). The CBR plans to update and publish its annual inflation forecast following the meeting of the regulator's board of directors on the key rate on July 21. The figure is also slightly below the Economic Development Ministry's current forecast of 5.3%.

The consensus forecast among economists polled by Interfax in early June calls for inflation of 5.8% in 2023.