Inflation in Russia has already reached the level of 4%

MOSCOW, may 15. /TASS/. Inflation in Russia has already reached the target of 4%. Stated in the Inflation pattern of economic development, published on the Ministry’s website.

“Subject was observed during the first half of may and the expected further normalization of the dynamics of prices for fruit and vegetables, according to our estimates, inflation has already reached 4% (as of may 15, 2017)”, – the document says. Inflation in April was 4.1% year-on-year after a 4.3 percent a month earlier.

The main contribution came from the increase in the growth rate of prices for fruit and vegetables (up to 4.7% month-on-month in April after a 0.3% month-on-month in March and 0.6% month-on-month in February). This trend most likely reflects the compensatory growth of prices after the atypically low results of February – March, which, according to our estimates, should be exhausted in may because of preserve generally favorable market food products,” – noted the authors of the document.

The document also notes that, while maintaining the exchange rate at the current level until the end of the year inflation in December may decline to 2.9%.

However, as noted in the materials of the Ministry, the trajectory of inflation is not the baseline scenario. With the weakening of the ruble in accordance with the basic forecast of Ministry of economic development inflation at the end of the year is expected to reach 3.8% year-on-year.

In materials, the MAYOR said that inflation excluding food products, regulated prices and tariffs excisable products (“core inflation”, in the least exposed to shocks from the supply side and other one-off factors) in April rose to 3.2% (adjusted for seasonality) after 2% a month earlier. “Here the key role played by the gradual exhaustion of effect of the rouble. The most significant strengthening of the ruble was in December 2016 and its influence remained significant until March of this year. Thus, according to estimates, the “core inflation” excluding the exchange rate factor in April was 3.2% (adjusted for seasonality). For the first time since July last year, the effect of the strengthening of the ruble had a negative impact”, – stated in the materials of economic development.

The forecast of the Central Bank

At the same time, the Central Bank expects annual inflation in may in the range 4-4,2%. The journalists said the Director of the Department of monetary policy of the Central Bank Igor Dmitriev.

“Our forecast for may was 4.1% plus or minus 0.1 percentage point. The may year-to-year – 4-4,2%. Here is our approximate estimate for may,” – said Dmitriev.

According to Rosstat, in April inflation amounted to 0.3% and in annual terms, consumer price growth slowed down to 4.1%.