CPI reached 6.3% YoY for 1-10 September and 0.26% MTD
According to Rosstat, CPI growth reached 0.26% during the first ten days of September (vs. -0.1% MoM for 1-12 September last year). Over 4-10 September, the average daily price growth decreased to 0.014%, from 0.053% in the previous week (and daily deflation of 0.014% for 6-12 September last year). The key driving forces behind CPI growth this week were eggs (2.1% WoW), flour (1.7% WoW), chicken (0.7% WoW), bread (0.5% WoW), and regulated tariff increase (water supply (cold at 0.3% WoW and hot at 0.5% WoW), and central heating (0.6% WoW)). Meanwhile, fruit and vegetables deflation decelerated to -2.8% WoW, from -3.2% WoW in the previous week.
Although average daily growth decelerated last week and the deflation in fruit and vegetables continued, in annual terms headline CPI advanced to 6.3% YoY as of 10 September on the back of deflation last year. However, we believe that the effect of problems with this year’s harvest will continue spurring inflation in the coming weeks, although the unfavourable base effect will be getting lower in September-October. Thus, we see food CPI growth continuing to accelerate but not as pronounced as in the beginning of the autumn, and are amending our estimation of September CPI to 0.4% MoM and 6.4% YoY (vs. 0.1% MoM and 5.9% YoY in August).
Maxim Oreshkin, Daria Isakova
VTB Capital analyst
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