Russian consumer prices extended their decline for the eighth week running, data showed on Wednesday, thanks to a seasonal drop in fruit and vegetable prices, sluggish consumer demand and the ruble’s strengthening over the past few months.
Separately, the ministry of economic development said Russia’s economy shrank by 4.3 per cent in July from a year earlier after falling 4.9 per cent in June. In January through July, the economy declined by 1.1 per cent from the same period a year ago.
The consumer prices index dipped 0.16 per cent in the week to Aug. 29 after easing 0.15 per cent a week earlier, the federal statistics service Rosstat said.
Annual inflation slowed to 14.31 per cent as of Aug. 29 from 14.60 per cent a week earlier, the economy ministry said.
The inflation pattern may open the door for more rate cuts by the central bank, which last month slashed its key rate by 150 basis points to 8 per cent and indicated it was ready to consider further monetary easing. The next board meeting is scheduled for Sept. 16.
Despite the recent incremental declines in the CPI, prices for nearly everything, from milk and sugar to clothes and smartphones, have soared since Feb. 24 when Russia sent tens of thousands of troops into Ukraine.
Year-to-date, prices for foreign-made cars, sanitary pads and soap rose by around 40 per cent, while the headline consumer price index rose 10.38 per cent compared with a 4.69 per cent increase in the same period of 2021, Rosstat data showed.
High inflation has been one of the key concerns among households for years as it dents their spending power and living standards, something that this year will be aggravated by recession in the economy.
Russia’s economy will shrink by less than 3 per cent in 2022, a top government official said this week, far less than initially expected, suggesting the economy is dealing with sweeping Western sanctions better than feared.
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