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Monetary policy helps keep inflation close to target

9 September 2020

In August, despite accelerating inflation, inflationary pressure, adjusted for temporary and one-off factors, was consistent with the target. Monetary policy is set to help keep inflation close to 4% in 2021, according to the authors of the latest issue of Talking Trends, the Bank of Russia Research and Forecasting Department’s bulletin.

As restrictive measures were gradually lifted in June and July, the recovery of economic activity continued in August, albeit at a slower pace.

Consumer demand growth was the highest. Along with a partial recovery in incomes, consumer activity growth was supported by deferred purchases, social support measures and consumers switching from foreign to domestic travel. At the same time, demand for goods reached its pre-coronavirus level. Consumption of services, though growing, remains subdued due to partially remaining restrictive measures and a shift in consumer preferences. External demand is recovering at a slower pace compared to domestic demand.

The views and recommendations expressed in the bulletin do not necessarily reflect the official position of the Bank of Russia.