Household inflation expectations in Russia rise to 11.5% in Aug from 11.1% in July - Central Bank

MOSCOW. Aug 23 (Interfax) - Inflation expectations continued to grow in August, increasing by 0.4 percentage points since July to 11.5%, the Russian Central Bank said in a commentary.

"The growth of inflationary expectations is associated with the dynamics of both actual inflation and the exchange rate," the Bank of Russia said.

Its policy is aimed at reducing inflation expectations and returning inflation to its target, the CBR said. The Central Bank still maintains its July inflation forecast for 2023 at 5.0-6.5%. Inflation, according to the forecast, will return to the target of 4% in 2024 and will be close to this level in the future.

Business price expectations in August rose to their highest levels since May 2022.

Earlier it was reported that household inflation expectations in July rose to 11.1% from 10.2% in June.

In August, with the weakening of the ruble, inflation expectations increased for households both with and without savings, a poll by inFOM said.

Annual inflation observed by households continued to decline in August. The median estimate was 13.5%, down 0.3 percentage points vs. July. The decrease in estimates of observed inflation was mainly from the subgroup of respondents without savings. Among those surveyed with savings, they were practically unchanged.

In August, the attitudes of survey participants toward observed rising prices for certain goods and services were multidirectional. Respondents' concern about rising prices for salt and sugar, gasoline, meat and poultry, as well as tea and coffee has noticeably increased. Respondents' concern about rising prices for fruits and vegetables (due to the seasonal factor), fish and seafood, cheese and sausages, and household chemicals has decreased.

Long-term inflation expectations did not change in August: the median estimate for the next five years, as in July, was 9.5%.