Inflation in September significantly below forecast

Annual inflation decreased by 0.3 pp in September to equal 4%, which is considerably below the Bank of Russia’s forecast. These are the findings presented in the new issue of the Bank of Russia’s information and analytical commentary ‘Consumer Price Dynamics’. Price growth slowed down in all main groups of goods and services.

Price dynamics reflected the dominant influence of a range of disinflationary factors, while proinflationary risks did not materialise. In particular, moderate demand (both external and internal demand, including demand associated with budgetary expenditure) had a more notable impact on prices. Inflation deceleration was also driven by the ruble appreciation and expanded supply in individual food market segments (meat products, sugar, some grain products).

In this context, growth of prices for a broad range of goods and commercial services slowed down.

Given the current price dynamics, the Bank of Russia Board of Directors may revise the 2019 inflation forecast downwards at its next meeting to be held on 25 October 2019.