Inflation up to 8.13% y-o-y in October despite CBR series of rate hikes

RUSSIA ECONOMICS - In Brief 03 Nov 2021 by Alexander Kudrin

Rosstat reported that inflation in October continued to accelerate – the m-o-m figure was at 1.11%, while inflation y-o-y accelerated to 8.13%. Inflation YTD reached 6.49%. Inflation w-o-w remained steady and high, showing no clear signs of deceleration (in the seven days ending on November 1, it was 0.21% w-o-w). Core inflation was up by 8.03% y-o-y, which is not much different from the headline number. Note that Rosstat doesn’t publish weekly core inflation statistics. Overall, core inflation in Russia has been traditionally very close to the headline inflation as fuel and energy prices are somehow regulated by the authorities. Food prices grew by 10.89% y-o-y. It is not yet clear whether the weekly lockdown that should end from November 8 could suppress inflation, but if it happens, then the effect is likely to be temporary as federal budgetary spending will grow massively in November-December.Overall, the CBR may increase its key rate again on December 17, when the next BoD meeting is scheduled.Evgeny GavrilenkovAlexander Kudrin

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