Russian inflation falls to just over 3%

Annualized inflation in Russia has slowed to a rate of 3.15% as of April 10, according to data from the central bank.

According to the regulator, this happened “mainly due to the effect of the high statistical base of the spring of 2022,” when prices surged amid the first rounds of Western sanctions and tensions regarding the conflict with Ukraine.

The indicator continued to fall after a sharp drop to 3.51% in March from 10.99% in February. The last time the consumer price index in Russia fell below 4% was 2020.

Overall, prices in the country have risen 1.67% since the beginning of 2023. The rise in prices for goods slowed significantly, while the slowdown in the costs of services was less noticeable, the regulator said.

The Bank of Russia warned, however, that inflation may accelerate in the coming months following the current drop, due to the low monthly growth rates of the second half of 2022, against which the indicator is calculated.

“There were high values – in February, March, April last year, when these record high values come into the calculation, our annual inflation rate slows down quickly; starting from May and in subsequent months the price growth rate was very low, and in some months, even negative. Accordingly, when these months come into the calculation, the rate of annual inflation will go up,” the deputy chairman of the central bank, Aleksey Zabotkin, explained.

Analysts estimate that, with the current monetary policy, annual inflation will be between 5 and 7% by the end of the year, but is likely to return to the target of 4% in 2024.

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