The Bank of Russia has become more hawkish this year, warning as it held its key rate at 7.5% last month that further widening of the budget deficit may compel it to raise the cost of borrowing. Analysts polled by Reuters expect a hold.
Consumer prices rose 0.02% in the week to March 13, Rosstat said, compared with no change in the previous week and a marginal drop the week before.
Since the start of the year, prices have risen 1.32%, a slower pace than in the same period of 2022, Rosstat said. Inflationary pressure, though elevated, is showing signs of easing. Inflationary expectations for the year ahead among Russian households, an indicator the central bank watches closely, dropped to 10.7% in March, data showed on Wednesday, down from 12.2% in February. "Such figures two days before the Bank of Russia's board of directors meeting effectively remove the question of a possible rate hike from the agenda," said CentroCreditBank economist Evgeny Suvorov. "The main intrigue now is - will the central bank will soften its rhetoric?"
Russia's annual inflation rate in 2022 was 11.9%, almost three times the government's official 4% target. The central bank forecasts inflation will be 5%-7% this year, falling to the 4% target in 2024. Russian households regularly cite inflation as a key concern, with many having no savings after a decade of economic crises. Rising prices have dragged living standards down. (Reporting by Darya Korsunskaya and Alexander Marrow; Editing by Andrew Cawthorne)
