The run rate of inflation was equal to the comparable week in the previous year at 0.0% WoW, after 0.11% WoW in the last report. Accumulated inflation has reached 9.5% YTD. The largest growth was registered in sugar, which edged up 1.4% WoW, while fruits and vegetables continued to experience a decline in prices on the back of seasonality, which is likely to remain strong into late August.
Our estimate of the two-digit headline CPI growth is 15.77%. Seasonal pressures are to continue weighing on fruit and vegetables prices into late August, and then start to fade. In addition, the high base effects of the 2014 ban on select food imports kicks in from August and could help to bring the headline price growth lower.
This is the last week of the month, which usually provides an opportunity for Rosstat to bring weekly prints in line with the upcoming monthly release. Thus, the estimate of 15.7-15.8% YoY seems the most likely for full July inflation (to be released next week).
Policy-wise, the current trends in the run rate support a further easing at the CBR’s Board of Directors meeting in July.