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Weekly CPI – inflation slows further to 0.4%, reaching 15.9% YoY as of 16 February

 
19.02.2015

According to Rosstat, CPI growth has reached 1.3% since the start of February, while the average daily price growth edged lower over the last week to 0.078%, from around 0.097% as of the end of last week. In terms of components, inflation last week was led by onions (+3.0% WoW), carrots (+2.0%), rice (+1.8%) and frozen fish (+3.1%).

Annual inflation accelerated to 15.9% YoY as of 16 February, from 15.7% YoY a week earlier. The product breakdown shows that the deceleration of inflation rates was broad-based. On average, items which Rosstat is tracking on a weekly basis grew 0.3pp slower than before. The steepest price growth declines were reported in tomatoes (-2.9pp), cucumbers and apples (both -0.8 pp).

This weekly print provides further evidence that the run rate of inflation is normalising. Assuming a persistent downward trend in the weekly price growth, we keep our estimate of 16.5% YoY CPI growth for February. On a longer horizon we think the headline CPI might continue to accelerate driven by the residual exchange rate pass-through price adjustment until March or mid-April and peak at 17.0-17.2% YoY. Starting from the second quarter, we expect the rate of inflation to edge lower as the demand-pull factors establish themselves as dominant.

Vladimir Kolychev, Alexander Isakov
VTB Capital analysts

Tags:
CPI, Rosstat

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