As expected, the past week brought relief in inflation dynamics after an acceleration in early August on the back of the second wave of regulated tariff hikes (most substantially in Moscow) and higher growth in the gasoline price (on the strong growth of rouble-denominated oil prices). In particular, prices for heating and hot water supply were flat on 6-12 August. All in all, headline CPI YoY growth stayed at 6.5% YoY as of 12 August, according to our calculations.
Next week we will likely see deflation WoW (as usual for the end of the summer) in the headline reading along with further intensification in fruit and vegetables deflation. Meanwhile, a good harvest this year, combined with the poor harvest last year, will push the YoY growth in food prices down in the months to come, and thereby contain headline CPI annual growth as well.
We expect monthly deflation in August at 0.1-0.3%, and, as a result, end-of-month YoY growth will likely reach 6.0-6.2%.