According to Rosstat, CPI totalled 0.38% on 1- 18 June. In the reported period alone (10-18 June), prices were up 0.16%, with daily price growth slowing to 0.018% from 0.028% the previous week. The same week of last year showed a daily growth rate of just 0.012%. Vegetables are still the key drivers of the weekly price growth (+4.4% in 10-18 June).
Weekly CPI growth remains significantly above last year’s levels driven by strong growth in vegetable prices, which due to abundant harvest in 2011 was later this year than during a typical seasonal pattern. Last year, vegetable prices declined 0.3% in the same week of June, as prices were coming down from the extremely high values of 1Q11 (as a result of the drought in 2010). This high-base effect is pushing vegetable and food prices YoY growth higher. On the back of the latest release, we are increasing our June CPI forecast to 0.6% MoM and 4.0% YoY (vs 0.5% MoM and 3.6% YoY in May).