Food price inflation levels out in March

Annual inflation rose to 5.3% in March, up from 5.2% in February, while seasonally adjusted monthly price growth was at its slowest since July 2018. Prices for fruit and vegetables showed much weaker growth as prices for the former dropped, reports the latest issue of ‘Consumer Price Dynamics: Facts, Assessments and Comments’.

In March, seasonally adjusted price growth slowed down to 0.3%, a reading consistent with annual inflation close to 4%. The Bank of Russia’s earlier forecast suggested that annual inflation is set to pass its local peak in March-April 2019, subsequently slowing down and returning to 4% in the first half of 2020.

Inflation came under the influence of temporary factors, mixed in nature. On the one hand, price growth remains strong due to the tax measures together with last year’s weaker ruble and rising fuel prices. On the other hand, inflation is curbed by the ruble’s appreciation in early 2019 and the agreements between the Russian Government and oil companies to cap growth of petrol and diesel prices.