Current price growth slightly slows down in June but still elevated
June 2021 saw a slight decline in the monthly consumer price growth (seasonally adjusted) as compared with May. This is communicated in the Bank of Russia information and analytical commentary Consumer Price Dynamics.
Price growth rates for staple goods and services as well as current indicators of sustainable price movements were down. However, inflationary pressure remains elevated. An active increase in demand outpacing the output expansion capacity was most evident in the acceleration of price growth for construction materials.
In June 2021, annual inflation rose to 6.5% partly due to the low base effect: June 2020 with its tight anti-pandemic restrictions witnessed moderate growth rates, especially in the services sector.
Given the timing of such effects wearing out and the monetary policy pursued, the Bank of Russia expects the annual inflation to start declining in autumn, return to the Bank of Russia’s target in the second half of 2022, and remain close to 4% further on.