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Daily CPI growth advanced last week


According to Rosstat, CPI growth reached 0.22% on 22–28 January (bringing the YTD print to 0.79%). Over 22–28 January, the average daily price growth strengthened to 0.031%, from 0.021% in the previous week (and was significantly above 0.009% for 24–30 January last year). The key driving forces behind CPI growth this week were (in order of contribution to headline reading) hot water supply (+1.7% WoW), gasoline (+0.5%), vodka (+0.8%), potatoes (+1.3%), and cabbage (+1.6%). At the same time, we saw deflation in central heating (-0.4% WoW) — a correction after three weeks of strong price growth.

Meanwhile, fruit and vegetable price growth continued decelerating, adding 1.1% WoW vs. 1.4% during the previous week.

The most recent reading implies that headline CPI has advanced to 6.9% YoY as of 28 January. The second round effect of the hike in minimum vodka prices and growth in fruit and vegetable prices are getting lower, but are still pushing CPI higher. We expect the full-January reading to come in at 0.9–1.0% MoM and 7.0–7.1% YoY (vs. 0.5% MoM and 6.6% YoY in December), further acceleration to the headline reading might come from a planned increase in prices of items not included in the weekly sample for CPI calculation (particularly in tobacco products, as the respective excise was hiked on 1 January 2013). Meanwhile, later this year, we shall be looking for a pick-up in the consumer price index during February followed by a gradual moderation in headline CPI with its return to the CBR’s target range as early as in July. We expect CPI to reach 5.4% at the end of 2013 after touching 5.0% in September.

Maxim Oreshkin, Daria Isakova, Mykyta Mykhaylychenko, Dmitri Fedotkin
VTB Capital analyst

CPI, Rosstat, gasoline, CBR

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