Rosstat has released its regular weekly CPI report (for 22-28 October). It implies that for 28 days of the month, consumer prices added 0.53% (vs. 0.52% during the same period of 2012). The average daily growth in consumer prices eased slightly to 0.019% during the reported period, from 0.023% in the previous week. The deceleration in the weekly consumer inflation was mainly triggered by moderating price gains on eggs (to 3.8%, from 5.9% a week ago), potatoes (to 1.0%, from 2.9%) and onion (to 1.1%, from 2.1%).
The recent weekly CPI print flags an encouraging deceleration in eggs, dairy and veg. prices that have so far been among the key inflation drivers. The annual growth in consumer prices nevertheless advanced 0.1pp to 6.1-6.2% as of 28 October owning to sharp inflation slowdown over late-October last year. We believe that drop in wheat prices this summer will ultimately crystallise into lower forage prices and consequently in the final retail price of eggs and dairy products. There is still elevated uncertainty as regards the magnitude of the impact from heavy rains on the potato harvest and consequent inflationary impulse on vegetables. All in all, we expect 0.5% MoM and 6.2% YoY CPI growth this month and retain our EY13 forecast of 5.9% YoY intact.
Vladimir Kolychev, Daria Isakova
VTB Capital analyst
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