Russia's annual inflation should begin gradually decelerating in spring 2024 - Central Bank

MOSCOW. Nov 7 (Interfax) - Inflation in Russia in annual terms should gradually begin decelerating in the spring of 2024, as households increase saving activity owing to higher rates, according to the report on monetary policy from the Central Bank of Russia (CBR).

"Expansion in demand should correspond to the growth rate in domestically oriented output going forward, thus it should not cause high growth in prices," the CBR notes.

Annual inflation should continue to accelerate in the fourth quarter of 2023, and the CBR estimates the figure at 7.25%, while the regulator notes that this is the central point of the forecast range. "Seasonally adjusted inflation in the fourth quarter of 2023 will significantly exceed 4% on an annualized basis," the CBR emphasizes.

The CBR in October raised its inflation forecast to 7%-7.5% for 2023 from 6%-7%. Accounting for the regulator's current monetary policy, the CBR expects annual inflation to drop to 4%-4.5% in 2024, which is also in line with the understanding of "close to the target", and should be close to 4% going forward.