Rosstat reports that the weekly CPI gain moderated last week to 0.12% from 0.26%, with the average daily price growth abating to 0.017% from the tariff-affected spike of 0.037% during the first week of July. At the component level, inflation last week was led by growth in the prices of eggs (+3.4%), gasoline (+0.5%) and chicken (+0.7%), as well as increases in the tariffs for heating (+0.3% WoW) and electricity (+0.4%).
The midpoint of the year marked a shift from rising inflation to disinflation, and the greatest interest in the latest weekly CPI report was the second-round effect of tariff increases on 1 July. Last week, higher tariffs across public services and transportation added 0.06pp to CPI, almost half that of the comparable period in 2013. In total, over the first half of July, the new tariff policy shaved 0.2pp from the YoY headline inflation, while faster deflation across vegetables took off another 0.2pp. At the same time, dampening but still substantially rising chicken and eggs prices, as well as inching up costs of gasoline, added 0.2pp to the headline number. As of the mid-July, we estimate headline CPI growth at 7.6% YoY, and it is likely to finish the month in the 7.5–7.6% range, we believe.
Daria Isakova, Vladimir Kolychev
VTB Capital analyst
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