At the end of November 2016, the level of inflation expectations, the Russians for the next 12 months, according to the Central Bank, declined to 5.6%, hitting a new record in the history of observations of the Ministry of economic development monitor the current situation in the economy of the country.
By the end of 2016 of consumer inflation in Russia will amount to 5.6 percent, said the Agency. This estimate is below the official forecast of Ministry of economic development on inflation in 2016 (5.8 percent). The document notes that as a result of a stronger ruble and continued low consumer demand, inflation will be lower than in the official forecast.
“Since the beginning of the year growth in consumer prices remains low. For the period from January until 12 December 2016 inflation amounted to 5.2%, a year earlier to 12.5%. It is a great success in the fight against inflation”, — stated in the monitoring of the MAYOR.
In accordance with the current forecast of the Bank of Russia, inflation in the country by the end of 2016 should be within the range of 5.5–6%. Commenting adopted on 16 December, the decision to keep the key rate at 10% per annum, the press service of the Central Bank announced that inflation is now declining mainly due to the strengthening of the ruble on the background of the risen in price oil and the increased interest of foreign investors in Russian financial assets.
In addition, for the sustainable reduction of inflation required a stronger reduction in the growth rate of prices for nonfood products was emphasized in the statement of the Central Bank.
In monitoring the MAYOR noted that the actions of the Central Bank “helped to preserve the necessary rigidity of monetary conditions to inflation will continue to fall”, slowing inflation and declining inflation expectations has had a positive impact on investor sentiment.
During the annual big press conference on December 23, President Vladimir Putin said that by the end of 2016 inflation will fall to a record low.
“Let me remind you that the best record we had in 2011 was 6.1%, this year we will have surely less than six. We thought it would be somewhere in the 5.7–5.8 percent. Most likely it will be somewhere around 5.5%. That is a record low level of inflation. This gives every reason to believe that we can achieve the targets and in the near future to reach the levels 5% and then 4% inflation”, — said the head of state.
At the end of November 2016, Bank of Russia Chairman Elvira Nabiullina said that even after lowering inflation to 4% per year, Russia remains one of the countries where inflation is particularly high, but further reduction may create new challenges for “emerging economy” of Russia.