The key driver of the acceleration of daily price growth in early August was a second wave of regulated tariff hikes (the most importantly in Moscow), with housing utilities playing the key role. Further, gasoline price growth accelerated to 1.4% WoW on the back of the strong growth of rouble-denominated oil prices, which in recent months was trading not far from the all-time high. It is important to note that this trend is also supportive for revenue side of the budget. But as we expected, rouble strength in the coming months is unlikely, and therefore the current growth pace in gasoline prices is set to remain for some time.
In the coming weeks, we expect a return to the downward trend in headline CPI as the negative base effect in fruits and vegetables becomes smaller, the positive base effect in grain-related items increases, and gasoline price growth cools. Moreover, the second wave of tariff hikes was likely was the last important one this year, while last year, for example, there was a strong wave of tariff hikes in September.
We expect deflation in August at 0.1-0.3% MoM, as result end of month YoY growth will likely reach 6.0-6.2%.