Inflation slows again in November
Supply in food markets expanded, bringing down inflation further to 3.5% in November. Moderate consumer demand and the ruble appreciation also contributed to the decline in consumer price growth, according to the new issue of the Bank of Russia’s information and analytical commentary ‘Consumer Price Dynamics’.
Food prices were up by 3.7% during the year (November 2019 vs November 2018). Moderate price growth was associated with larger volumes and better quality of the 2019 harvest (main grain and oil crops, sugar beet, fruit and vegetables). Another contributor was a higher output of meat products. Growth of prices for meat products continued to slow down. For the first time since October 2018, the annual growth rate of cheese prices dropped, and the dairy butter price index did not increase.
Prices for non-food goods were up by 3.1% during the year. The ruble appreciation and demand trends were the major reasons behind moderate price dynamics. In November, petroleum products became more expensive by as little as 1.5% as compared to the previous year. Price growth in this segment was limited due to the effect of the refundable excise tax mechanism.
Prices in commodity markets rose more slowly in November, while the services segment saw a slight acceleration in inflation. It was largely pushed up by an increase in annual growth rates of prices for overseas travels and services provided by cultural organisations and health centres. Quicker inflation in the market segment of the services sector may be a sign of revival in consumer demand.