The slowdown in inflation continued in January

Annual inflation in the first month of the year slowed down 0.6 percentage points to 2.4%. To a large extent the decline was due to the release of calculating the increase in the VAT rate last year. Also significant is the impact of the increased supply of food, the strengthening of the ruble in 2019 and restrained growth in demand, noted in the next issue of information-analytical review of the Bank of Russia “Dynamics of consumer prices”.

In January, food prices on average remained virtually unchanged (adjusted for seasonality). Fruit and vegetable products (including seasonal factors) dropping for the fourth month in a row. Reduced prices of almost all basic types, including vegetables “borsch”, cucumbers, and citrus fruits. Generally favorable market conditions of food products and agricultural raw materials in the coming months will be a major constraint on food inflation.

With non-food items for the month rose more than in the previous five months (adjusted for seasonality). The acceleration is associated with a slower decline or stabilization of the prices for communications equipment, household appliances, teleradiocomany and personal computers, as well as accelerated growth of prices for cars and oil products, including in connection with the increase in excise duties and the utilization fee from 1 January 2020.

The increase in the prices of services in January has also accelerated, mainly due to the increase of contributions for capital repair of housing.

14 Feb 2020