Russians’ inflation expectations for 12 months fall to historic low

MOSCOW (Sputnik) – Inflation expectations of Russian citizens for the next 12 months decreased in August to a record level of 9.5 percent, the Russian Central Bank said on Thursday.

“In August 2017, the inflation expectations of the population for the next 12 months predictably decreased. The direct assessment Infom (median value), calculated on the basis of answers to the question about the inflation level, decreased to the lowest level in recorded history by 1.2 percentage points to 9.5 percent,”

the Bank of Russia said in a report.

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Expectations decreased due to the fall of prices for fruit and vegetable products amid the new harvest as well as the decline in current inflation.

“The observable inflation continues to decrease. However, inflationary risks still exist. In order to keep the inflation near the target level and further decrease inflation expectations, the Bank of Russia is conducting a moderately tight monetary and credit policy,”

the report added.

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Russia’s consumer prices rocketed in late 2014 as the ruble plunged twofold against international currencies, with inflation reaching almost 17 percent in monthly year-on-year terms by early 2015. Inflation rates later declined, falling below 8 percent by early 2016 and reaching around 4 percent in July.

The Russian Central Bank has implemented a tight monetary policy with the aim of reach the 4 percent inflation mark by late 2017. In May, Central Bank Governor Elvira Nabiullina said the target was achievable and stressed that reducing interest rates prematurely could spur inflation without encouraging growth.