Russia’s annual inflation rate dipped further below the central bank’s 4 percent target in April due to the base effect of surging prices this time last year, data from the state statistics service published on Friday showed.
Inflation soared to almost 20 percent soon after Russia invaded Ukraine in February 2022, as the value of the rouble and imports into Russia plunged amid the fallout of the military campaign and imposition of Western sanctions.
In April, official inflation dipped to 2.31 percent on an annual basis down from 3.51 percent in March and more than 10 percent earlier this year, Rosstat said on Friday.
Despite the falling headline figures, Russia’s central bank has repeatedly warned of inflationary pressures across the economy and has maintained a hawkish rhetoric even as it has held interest rates at 7.5 percent in recent meetings.
It has pointed to a widening budget deficit – which came in at $44 billion in the first four months of the year – as potentially pushing up prices across the economy.
Russia recorded an extended period of falling prices last summer as surging export revenues and a collapse in imports pushed the current account to a record high. That means the base effect delivering low annual inflation at the moment could go into reverse in the coming months and the central bank has said annual inflation will start to climb again in May and June.
On a monthly basis, prices rose 0.38 percent in April, Rosstat said, comparable to the 0.37 percent increase in March. Food prices rose 0.29 percent during the month, up from 0.13 percent in March, while services inflation slowed from 0.97 percent to 0.79 percent. –Reuters
