Monthly Growth in Prices for Non-food Products Slows Down

The monthly rise in prices for non-food products slowed down in August, the Central Bank of Russia stated, noting that the trend does not apply to oil products, Russian media informed.

Annual inflation rose to 6.68%, as well as annual and monthly indicators of stable price dynamics. The decline in monthly price increases may reflect the beginning of a decrease in cost pressures on prices, as well as a more moderate pace of expansion in demand.

The reason for this is the slowdown in the growth of prices for building materials (5.1% in July and 0.4% in August) and cars.

However, the growth rate of prices for electronics and household appliances increased due to the global shortage of microcircuits and high-tech components. In general, the rise in prices approached the spring values.

At the same time, heightened inflationary expectations and limited opportunities for a rapid increase in output support inflation.

According to the regulator’s forecast, the process will slow down in the fourth quarter of 2021 thanks to the key rate hikes. In 2022 it is expected that inflation will decrease to 4-4.5% and then will be fixed at 4%.