Rosstat released its weekly CPI report for 16-22 April yesterday. Average daily consumer price growth went lower to +0.018% (vs. +0.023% a week ago and +0.011% during the respective week in 2012). Growth in vegetable prices remains the key CPI driver (particularly potatoes (+4.9% WoW vs. +3.4% WoW the previous week) and cabbages (+3.2% WoW vs. +1.9% WoW the previous week)). Moreover, gasoline prices deflated (-0.3% WoW following zero growth over the two previous reported periods). Vodka prices increased a mere 0.2% WoW (similar to the three previous reported periods).
The inflation report suggests that annual CPI growth edged up to 7.1%, adding 0.13% over the last week. Seasonal inflation in vegetables this year has started earlier than last year: this will support headline CPI YoY growth in April, but will lead to a stronger decline in May, we believe. Thereby, as the base effect in vegetables is set to become favourable in May, disinflation in May-June will be stronger than previously expected, we believe. Overall, we see current acceleration in daily price growth as temporary; however, we have now slightly amended our full-April forecast to 7.1% YoY.
Maxim Oreshkin, Daria Isakova
VTB Capital analyst
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