The Russian economy is very likely to experience monthly deflation in August, but consumer prices will be up 4.4-4.5% in year-on-year terms, the economy ministry said on Wednesday, according to Reuters.
Deflation may come at 0.2-0.0% due to falling prices for vegetables and fruit, the ministry said.
Annual inflation in Russia slowed down in July 2019 to 4.58% after 4.66% in June, the Economic Development Ministry said in a report on Wednesday.
“In July 2019, annual inflation continued to slow down — to 4.58% after 4.66% a month earlier,” the report stated.
An increase in consumer prices was mainly driven by adjustment of tariffs on housing and public utilities to the actual inflation. Tariffs rose by 2.47%, the ministry informed.
According to ING analysts, the slowdown in the Russian inflation growth from 4.7% YoY in June to 4.6% YoY appears positive at a first glance, as it is below the consensus forecast of 4.7%.
“However, a closer look at the CPI composition suggests that only the services segment (c. 28% of the total CPI basket) showed deceleration in the growth – from 4.9% YoY in June to 4.5% YoY in July – thanks to a more restrained indexation of communal housing tariffs: by 2.4% in July 2019 vs. 4.0% in July 2018,” the analysts wrote.