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Weekly CPI – inflation crawls up to 7.6% as of 26 May

According to Rosstat, CPI growth reached 0.80% during the first 26 days of May, while the average daily price growth spiked to 0.039%. Component-wise, inflation last week was led by pork (+1.9% WoW), potatoes (+2.4%), chicken (+0.9%), cabbage (+4.0%) and onion (+3.4%), while the deflation in eggs (-2.6%), cucumbers (-7.1%) and tomatoes (-4.5%) persisted.

The latest weekly CPI report reveals the highest (barring the periods of tariff hikes) daily pace of inflation since the drought-affected 2010. Annual inflation accelerated to 7.6% YoY as of 26 May, from 7.3% YoY at the end of April.

Looking through the details, pork inflation, although still one of the key drivers, moderated slightly, suggesting that price gains across non-reported items must have accelerated. On the latter point, there is no complete set of product details, but among the most likely drivers might be either accelerating inflation in meat-related products (that lag the upsurge in pork prices) or a delayed FX-pass through into core items.

The weekly prints point to a 0.9-1.0% MoM increase in CPI, implying 7.6-7.7% in YoY terms. Looking beyond May, headline CPI might continue to accelerate until the middle of June (to a peak of 7.8-8.0% YoY) as the shock on the pork/meat market proves to be rather sharp and persistent, but could moderate starting from July on tariffs, the base effect, a fading FX pass-through, and demand-pull disinflation.

Daria Isakova, Vladimir Kolychev
VTB Capital analyst


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