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CPI remained at 6.5% YoY as of 6 November


According to Rosstat, the CPI increased 0.09% in the first six days of November. The average daily price growth accelerated to 0.015% during 1-6 November from 0.002% in the previous week, and was much lower than the 0.022% for 1-7 November last year.

The detailed breakdown shows that last week’s growth came mainly from flour (+1.0% WoW), sunflower oil (+0.6% WoW), eggs (+0.5% WoW), millet (+0.7% WoW) and heating (+0.4% WoW). Meanwhile, the deflation in fruit and vegetables weakened further to -0.6% WoW (from -0.8% WoW, during the previous week). The growth in gasoline prices was flat last week, at 0.2% WoW.

Last week’s acceleration in prices growth was not a surprise as we had not expected the slowdown in CPI growth during late-October to prove sustainable. The weekly CPI increased to 0.1% WoW, while YoY growth remained stable at 6.5%. Given the weakening fruit and vegetables deflation, other seasonal factors and the persistently tight labour market, we might see full-month CPI growth at 0.5-0.7% MoM and 6.6-6.8% YoY in November. Meanwhile, it is worth noting that in the same week last year prices added 0.15% WoW, meaning that this year CPI growth is running slightly lower than in 2011. This poses downwards risks for our end-year CPI growth forecast of 7.3% YoY.

In terms of the CBR’s monetary policy decision today, soft inflation in recent weeks supports our expectation of no repo rates hike. 

Maxim Oreshkin, Daria Isakova
VTB Capital analyst

CPI, Rosstat, CBR

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