CPI growth reached 0.13% during the first five first days of May, while the average daily price growth slowed to 0.025%, from the 0.030% observed over the previous seven weeks.
Component-wise, inflation last week was led by pork (+2.2% WoW), onions (+2.6%), cabbage (+5.4% WoW), potatoes (+1.3%) and chicken (+0.6%).
The first weekly CPI report in May confirmed that the current inflation risks are grouped in several food categories (i.e. pork and vegetables), while stronger deflation in eggs, coupled with decelerating vodka and gasoline prices, limits inflation pressures. Overall, the pace of growth in consumer prices started to soften last week and during the rest of the spring we expect the average daily price growth to match that in May 2013.
Concerning the full-month increase in consumer prices, we think it could reach 0.7%, which would likely translate into 7.4% in YoY terms (vs. 7.3% YoY as of the end of April). Beyond this month, we anticipate headline CPI peaking in May-June on the peculiar shocks on the food market and FX pass-through, before significant disinflation in 2H14 to 5.3% by the year-end.