Anticipated rise in inflation across Russia this May.
Heads Up: Russian Inflation Slowdown on the Horizon
Prepare for a potential reduction in Russian inflation rates, set to unfurl in May, according to Elvira Nabiullina, the Central Bank chair. At a recent press conference after the board meeting, she revealed this news while keeping the key interest rate steady at 21% annual.
Nabiullina pinpointed the peak inflation occurrence in the last year's fourth quarter, with today's seasonally adjusted inflation rates having almost halved in the first quarter compared to the fourth. "Year-on-year inflation... we anticipate a reversal and a descent starting in May, depending on the comparative month of the previous year," Nabiullina shared.
While she predicted a decline, Nabiullina cautioned a slight inflation spike in July. This increase would be linked to the "constant factor" of utility tariff indexation.
It's worth noting that the Central Bank's updated medium-term macroeconomic forecast retains its expectation for inflation: it is projected to dip to 7-8% by year-end and fall back to 4% by 2026, remaining steady thereafter.
As of April 21, the annual inflation rate, according to the Central Bank, clocked in at 10.3%. Overall, inflation expectations among the populace, businesses, and financial sector participants continue to linger notably high, which hinders a swifter inflation slowdown, the Bank noted.
Moscow, Elena Volodina
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Enrichment Insights:
- Annual Inflation Forecast for 2025: Estimates for the Bank of Russia and the Economic Development Ministry suggest an annual inflation rate of 7.0-8.0% (Bank of Russia) and 7.6% (Economic Development Ministry) for 2025, gradually declining from the current rate [1][2].
- Current Inflation Trends: As of early April 2025, Russia's annual inflation rate was 10.3%, averaging 8.3% quarterly when annualized, based on adjusted price growth in Q1 2025 [3].
- Monthly Inflation Rate Projections: A decline in annual inflation rates to 7.0-8.0% in 2025 suggests a gradual decrease in monthly inflation rates; however, specific monthly rates would be determined by factors like global oil prices, domestic demand, and economic policies.
To learn more about potential fluctuations in monthly inflation rates, keep tabs on official updates from the Bank of Russia or relevant statistical agencies!
- The Central Bank chair, Elvira Nabiullina, has predicted a decline in Russia's inflation rates, anticipating a reversal and descent starting in May.
- In her announcement, Nabiullina also cautioned a slight inflation spike in July, attributed to the "constant factor" of utility tariff indexation.
- The Central Bank's updated medium-term macroeconomic forecast projects inflation to dip to 7-8% by the end of the year and fall back to 4% by 2026.
- Despite promising signs of a slowdown, inflation expectations among the populace, businesses, and financial sector participants remain notably high, hindering a swifter improvement.
