Yesterday, Rosstat released its weekly CPI report for 23-29 April. Average daily consumer price growth remained at 0.018% (vs. +0.007% during the respective week in 2012). The growth in vegetable prices remains the key CPI driver (in particular, potatoes (+4.1% WoW vs. +4.9% WoW a week ago) and cabbage (+5.5% WoW vs. +3.2% WoW)). Gasoline prices kept deflating (-0.2% WoW), while the growth in vodka prices halved to +0.1% WoW (from the +0.2% WoW over the four previous reported periods).
The inflation report suggests that annual CPI growth edged up to 7.2%, adding 0.52% over 1-29 April. Seasonal inflation in vegetables has started earlier this year than in 2012, which is likely to support headline CPI YoY growth in April but lead to a stronger decline in May. Thus, as the base effect in vegetables is set to become favourable in May, disinflation in May-June could well be stronger than previously expected, we believe. Overall, we see current the acceleration in daily price growth as short-lived. However, we have now slightly amended our full April forecast to 0.5% MoM and 7.1-7.2% YoY.
Maxim Oreshkin, Daria Isakova
VTB Capital analyst
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