Inflation in Russia could exceed CBR's forecast of 6%-7% if monthly trends persist near 2021 trajectory - CBR analysts

MOSCOW. Oct 17 (Interfax) - Inflation in Russia could exceed the Central Bank's (CBR) September forecast of 6%-7% if monthly price growth remains near the high levels of 2021, analysts at the regulator said.

In recent weeks, price growth has been following the high trajectory of 2021. If monthly price growth stays close to it until the end of the year, inflation may exceed the Bank of Russia's current forecast, the Central Bank's Research and Forecasting Department said in its Talking Trends bulletin.

In October-December 2021, inflation averaged about 1% per month (1.11% in October 2021, 0.96% in November and 0.82% in December).

In January-September 2023, prices in Russia increased by 4.60%. Inflation in September 2023 amounted to 0.87% after 0.28% in August.

With seasonality removed, consumer price growth in September (month-on-month) accelerated to 14.6% compared to 9.4% in August, Central Bank analysts said. Annual inflation rose to 6.0% in September from 5.2% a month earlier. On October 9, the annual inflation estimate rose to 6.3%.

Steady price trend indicators suggest that inflationary pressures remain at an elevated level, the Central Bank analysts said. They noted the prevalence of pro-inflationary risks on the medium-term horizon.

The possibility of transferring the increased costs of producers to final prices amid conditions of continuing high consumer activity supports inflationary pressure at an elevated level, the document indicates.

The recent monetary policy decisions will lead to a gradual deceleration of inflationary processes in the coming months and quarters, the Central Bank analysts said. The return of inflation to target amid stimulative fiscal policy in 2024 may require additional tough monetary measures, the experts believe.