analysts record the acceleration of consumer inflation in recent weeks


Analysts unanimously record the acceleration of consumer inflation in recent weeks. According to Raiffeisenbank economists, based on weekly data from Rosstat, by the beginning of July, inflation accelerated to 3.4% in annual terms, while in June the figure could reach 3.2-3.4%. “Over the past two weeks, the contribution of fruit and vegetable products has changed sign to positive, inflation for a large part of goods and services has begun to accelerate,” they record. According to their estimates, for almost 50% of the components of the consumer basket (taking into account the weight of fruits and vegetables and regulated services are excluded from the calculation), the annualized sliding window inflation per month exceeds the Central Bank’s target of 4% (including meat and gasoline; see chart). Estimates by analysts of the Hard Digits Telegram channel, taking into account vegetables and regulated services, show that from June 27 to July 3, the share of goods with rising price indices decreased to 78% from 81%, but the share of goods with rising price indices faster than the target 4%, rose to 64% from 63%. They expect annual inflation to accelerate to 4.1% in July.

One of the reasons for the expected acceleration is the transfer of ruble weakening to domestic prices. For example, the UN FAO food price index (in dollars) for June fell by 1.4% and by 20.9% in annual terms. The ruble index, due to the depreciation of the national currency, grew in June by 3.7% and by 9.7% in annual terms (in April, it was 1.8% less than a year ago, analysts of the MMI Telegram channel calculated ). Measurements of inflation expectations made by them in July (4.6 thousand respondents) record a sharp increase in median observed and expected inflation in a year of inflation (from 13.5% to 14.5% and from 11.8% to 15.9 % respectively).

“At 83 rubles. per dollar (average June exchange rate), the growth of the dollar and yuan against the ruble was comparable to the growth in inflation over the period under review (since the start of covid shocks). But at 12.6 rubles. for yuan and 92 rubles. per dollar, the deviation from cumulative inflation is already 10-12%, and this difference will begin to be transferred to prices. The carry-over will be stronger the higher the inflation expectations. This creates a risk that the Central Bank will not be able to keep inflation at 4.5–6.5% this year (official forecast), and in order to return it to the target in 2024, a very strong rate increase will be required,” the authors of the Telegram channel believe. MMI.

Artem Chugunov

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