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 slight 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. Separately, the economy ministry said inflation was running at an annualised rate of 7.65% as of March 13, slowing from 9.43% a week earlier. 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 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 and Mark Potter)
