Households’ inflation expectations went down to 8.3% in November as compared to 8.6% in October, reaching their lowest level since last May. Businesses’ short-term price expectations changed only slightly, staying close to their local lows. Analysts reviewed their price growth estimates downwards. This information is given in the Bank of Russia’s new commentary Inflation Expectations and Consumer Sentiment.
In November, fewer respondents mentioned higher prices for main food products and services. The number of respondents referring to utilities, cheese and sausages, fish and seafood, petrol and sugar decreased the most. Such responses are in line with Rosstat’s statistics: annual growth rates of prices for all core consumer basket components went down in October.
Businesses’ price expectations were close to their lows recorded in mid-2018. Companies stated two main reasons for slower inflation. Firstly, weak demand limited the possibility for companies to raise prices. Secondly, they had to optimise their business processes and reduce costs due to rising competition.
In November, four-year annual imputed inflation for OFZ-IN remained at the level recorded in October (about 2.8%). Analysts continued to adjust their 2019 inflation expectations downwards to 3.4–3.7%.