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Weekly CPI – annual inflation posted an uptick to 7.1% as of 7 April

 
10.04.2014
According to Rosstat, CPI growth reached 0.22% during the first week of April. Over the reported period, the average daily price growth advanced slightly to 0.032% (from 0.031% in the previous week), remaining twice as high as in April 2013.  

Given upward inflationary pressure from the weaker currency, it was a little surprise that annual CPI growth crossed the 7.0%-mark last week (we calculated that with the 0.22% increase in consumer prices during 1-7 April, YoY inflation crawled up to 7.1%).

We have not noticed any big reshuffles in the inflation drags/drivers mix. As has been the case of late, vegetable, gasoline and vodka prices constituted the major drivers, while the contribution to inflation from the undisclosed part seems to have been tangible and fuelled by higher prices on cars and pork (as their upward trend, which started several weeks ago, is unlikely to have disappeared so fast).

Nevertheless, dairy prices ticked up again after a short relief and the growth in bread prices gathered pace. We might link this to the recent spike in global wheat prices (amid the Ukraine crisis), and expect more prices rises to come (although it is encouraging that wheat prices have stabilised recently).

On an upbeat note, fruit and vegetable prices kept moderating; if this trend continues/stabilises near the current growth pace, given their acceleration last spring, we expect the favourable base effect to compensate in part for the FX pass-through on YoY inflation.

Hence, for full-April we expect the MoM consumer price gain to reach 0.8%, given an average daily price growth of near 0.03% during the last weeks of April. In this case, the full-April headline CPI would show an increase in annual growth to 7.2% YoY, the highest since May 2013.

Vladimir Kolychev, Daria Isakova
VTB Capital analyst

Tags:
CPI

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