The CBR has just released its weekly CPI report for 2–8 July, which implies a significant moderation in average daily consumer price growth, to 0.022% in 2–8 July from 0.332% to 1 July. The key CPI growth drivers remained electricity and heating, as well as water supply costs, but their contribution to inflation decreased sharply over 2–8 July vs. 1 July. Meanwhile, fruit and vegetable prices stopped growing last week vs. growth of 0.7% WoW a week earlier.
The recent weekly CPI report implies that the
Stalled fruit and vegetable prices provided additional support to our view that the good harvest this year, in combination with the poor harvest last year, will push YoY food price growth down in coming months and thereby contain headline annual CPI growth as well. Given that the currently favourable weather conditions for a good harvest outlook, we are maintaining our CPI forecast of 6.0% YoY at the end of August and of 5.5% YoY at the end of September.
From a monetary policy perspective, the recent inflation data (decline in YoY headline below the 7% mark in June and a continuation of the slowdown in growth of consumer prices in early July despite higher tariff increases this year) reinforced the view that there is no meaningful