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inflation
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20DEC12
Weekly CPI – inflation moderation continues to outpace expectations
According to a report released by Rosstat, CPI increased 0.27% on 1-17 December. Average daily price growth stood at 0.019% last week, up from 0.014% registered in the previous week and a bit below the 0.020% recorded on 13-19 December 2011. The detailed breakdown shows that last week’s growth came mainly from WoW price rises in eggs (2.0%), potatoes (1.3%), cabbage (1.4%), rye bread (0.6%), milk (0.3%), and butter (0.3%). Furthermore, fruit and vegetable prices continued to accelerate last week...
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6DEC12
Inflation again surprised to the downside
... in the previous month. In MoM terms, it added mere 0.3%. The non-food component eased to 5.2% YoY in November, from 5.3% YoY in October. The annual growth in the other main parts of the consumer prices index remained unchanged across the board: food inflation was flat at 7.3% YoY (for the third consecutive month), services’ prices grew 5.8% YoY and Rosstat’s core inflation was at 7.2% YoY. In separate news, according to the weekly CPI report, the CPI increased 0.04% in the first three days of ...
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15NOV12
Low and stable inflation ahead?
Slow growth and surprisingly low inflation are likely to lead to the end of the CBR’s tightening cycle. However, does that mean the CBR has achieved longterm success in fighting inflation in Russia? I believe that we shall not see the answer to this question until 2H13 and that the ...
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24JUL12
Food shock 2012 — Inflation higher, trade balance weaker
This year’s higher global wheat prices (mainly because of the drought in the US) and poorer harvest in Russia YoY mean that we could see more severe inflation risks and a weaker trade balance. According to our base case scenario for 2012, Russia’s harvest is at a normal level (down from last year’s above normal), except for grain. Unlike 2010, when a drought seriously affected the Russian harvest ...
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5APR12
Inflation stays at 3.7% YoY in March
According to Rosstat, CPI accelerated to 0.6% MoM in March (from 0.4% MoM in February), while in annual terms, it was flat at 3.7% YoY. The detailed breakdown reveals that services and non-food inflation remained unchanged in March, while food inflation subsided to a new historical low of 1.3% YoY (from 1.5% YoY). Core inflation increased to 0.5% MoM (from 0.4% MoM), while in annual terms, it softened to 5.5% YoY (from 5.7% YoY). The ...
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19JUN13
IP contracted 1.4% YoY in May
... alarming. Coupled with what we expect to be downbeat economic statistics for May (full data due later this week), that will likely push the regulator to opt for a more decisive easing move as early as in July (especially given the recently started disinflation trend).
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17JUN13
Shvetsov on monetary policy
... Shvetsov about planned modifications to the regulator’s monetary policy. Refinancing toolkit. Shvetsov again confirmed that the one-year refinancing facility at floating rates (close to the one-week auction repo rates (5.50%)) would be launched in 3Q13. Inflation target. The regulator sent an idea to the government about shifting the CBR’s CPI target from the current range to a fixed point with allowable deviations. At the moment, the rates on the CBR’s medium-term refinancing facilities vary ...
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10JUN13
CBR Monetary Policy Preview
Today, the CBR is due to decide on key interest rates. The meeting will be the last chaired by Governor Sergei Ignatiev: with repo rates left unchanged he would keep his anti-inflation image. Although the regulator is close to broadening easing, the almost two-year high in headline CPI is set to prevent the CBR from making the next step this time. We will likely see only medium-term rates cut, similar to the previous two meetings,...
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7JUN13
Russian Economy Monthly for June
... negative real growth of budget spending and weak commodity behaviour, while consumer demand is weakening, impacted by the growing savings ratio. The May data is set to be even worse, affected by the extended holidays. CPI at its 2013 peak; June to bring disinflation. May's inflation reading, spurred by the earlier seasonal pick-up in vegetables, surprised to the upside. We expect a sharp decline in the headline CPI growth reading to start in June on the back of the favourable base effect in food prices ...
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5JUN13
CPI intensified to 7.4% YoY in May
... driver was the acceleration in the prices for food (to 9.2% YoY, the highest level since July 2011, from 8.8% YoY in April) and transport (to 10.6% YoY from 9.0% YoY). Meanwhile, non-food prices continued to slow, down 0.1pp to 5.0% YoY. Rosstat’s core inflation edged up to 5.9% YoY, from 5.7% in April, to hit a 16-month high. Headline CPI reached a 2013 high in May, mainly driven by an acceleration in fruit and vegetable prices (which came earlier than in 2012) and a pick-up in railway transportation ...
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23MAY13
CPI up to 7.4% YoY as of 20 May
... potatoes (up 5.4% WoW vs. 4.1% WoW a week ago) and cabbage (up 5.4% WoW vs. 5.9% WoW). Gasoline prices stayed unchanged last week as in the week before, while the growth in vodka prices ticked up to 0.2% WoW (from 0.1% WoW over the previous week). The inflation report suggests that annual CPI growth edged up to just a bit below 7.4%, while adding 0.40% over 1-20 May. We note that the seasonal inflation in vegetables started earlier this year than in 2012, which spurred headline CPI YoY growth in April ...
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17MAY13
CBR plans to set CPI target range for 2014-16 at 4.5% YoY +/- 1.5%
... growth is at its potential. Debates over whether to include a growth goal into the CBR’s mandate should be postponed until the autumn. We see the 4.5% target as optimum for Russia: if achieved on a constant basis, it would mean low and stable inflation, but still with room for structural shifts in the economy. Widening the range from 100bp to 300bp will give the CBR more flexibility and allow it to be more forward looking. Had a more flexible approach been used this year, we believe we would ...
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14MAY13
May: struggling for growth
... pick-up in CPI on veg. prices short-lived. This year, vegetable prices started rising earlier than the previous year, adding upward pressure to CPI in April (rose to 7.2% YoY), but the base effect is set to be favourable in May, implying stronger disinflation in the coming months. RUB weakened in April on lower oil prices; bleak prospects. Last month, RUBBASKET was anchoring somewhere near 35.50 and occasionally crossed the upper boundary of the no-interventions sub-band, forcing the CBR to intervene....
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13MAY13
CPI stayed at 7.2% YoY as of 6 May
... particular potatoes (up 4.8% WoW vs. 4.1% WoW a week ago) and cabbage (up 5.1% WoW vs. 5.5% WoW). Gasoline prices kept deflating (0.2% WoW), while the growth in vodka prices ticked up a bit to 0.2% WoW (from the 0.1% WoW over the last week in April). The inflation report suggests that annual CPI growth remained at 7.2%, while adding 0.10% over 1-6 May. Seasonal inflation in vegetables has started earlier this year than in 2012, which spurred headline CPI YoY growth in April but which we expect to lead ...
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8MAY13
April's increase will likely be short-lived
... with our and market expectations. The key growth drivers were food prices accelerating to 8.8% YoY (from 8.3% YoY in March) and services tariffs to 8.1% YoY (from 7.9%YoY). Meanwhile, non-food prices slowed to 5.1% YoY (from 5.2%). Rosstat’s core inflation edged up a mere 0.1pp to 5.7% YoY in April. The pick-up in headline CPI in April was mainly driven by the acceleration in fruit and vegetables prices (which came earlier than in 2012) and slightly more expensive services. The main negative ...
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8MAY13
Igor Shuvalov, the first deputy prime minister, held a meeting on measures to boost economic growth
... Bank law is important, and, as a result of this process, we might see modifications to the CBR's current framework, we do not expect it to catch the market by surprise. Discussions on the CBR’s goals will continue, but we believe that low and stable inflation will sooner or later be introduced in law as the primary goal, as we believe that this is the main precondition for strong economic growth. Growth goals might be added, but only as secondary targets.
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6MAY13
Key events are CPI in April and meeting on Putin’s decrees
... that the regular meeting of the CBR’s Board of Directors on monetary policy will be held this week, as the official guidance implies any working day between 6-15 May. The full-month CPI report is likely to reveal a dichotomy in headline and core inflation measures: while the former picked up a bit on the earlier acceleration in vegetable prices (according to the recent weekly CPI reports), the latter is likely to remain subdued. Hence, we expect a 0.5% MoM and a 7.1% YoY increase in the consumer ...
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25APR13
CPI up 7.1% YoY as of 22 April
... (+3.2% WoW vs. +1.9% WoW the previous week)). Moreover, gasoline prices deflated (-0.3% WoW following zero growth over the two previous reported periods). Vodka prices increased a mere 0.2% WoW (similar to the three previous reported periods). The inflation report suggests that annual CPI growth edged up to 7.1%, adding 0.13% over the last week. Seasonal inflation in vegetables this year has started earlier than last year: this will support headline CPI YoY growth in April, but will lead to a stronger ...
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19APR13
Nabiullina admits current growth rates are below potential
... momentum and some monetary easing is possible. Andrei Klepach, Deputy Minister for the Economy, has been a long-time advocate of easier monetary policy. Also, Herman Gref, CEO and Chairman of the Management Board of Sberbank, yesterday said that an inflation slowdown was obvious and that the CBR might reduce rates before Nabiullina takes charge of the regulator. Hence, we see all of the abovementioned remarks as supportive for our out-of-consensus call for a 25bp cut of all key rates at May’s ...
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5APR13
CPI takes a nose dive to 7.0% YoY in March
... in February), below our expectations of 7.2% YoY. The key drags were decelerated food prices (to 8.3% YoY from 8.7% YoY in February) and services tariffs (to 7.9% YoY from 8.2% YoY). Meanwhile, non-food prices remained at 5.2% YoY. Rosstat’s core inflation edged down 0.1pp to 5.6% YoY in March. Inflation surprised with a sharp deceleration to 0.3% MoM and 7.0% YoY in March. Headline CPI growth declined for the first time since November 2012, and more importantly, core inflation also softened....
