Russia recorded weekly deflation in May for the first time

2022.06.29 19:46

Russia recorded weekly deflation in May for the first time

Budrigannews – Russia’s consumer price index was flat in the week to June 24, having declined for three weeks in a row after a massive spike in March, providing the central bank with room to cut rates to limit the economic downturn, data showed on Wednesday.

So far this year, consumer prices in Russia rose 11.51%, data from the federal statistics service Rosstat showed.

In a separate set of data, the economy ministry said annual consumer inflation slowed to 16.22% as of June 24, down from 16.42% a week earlier.

Russia will see a decline in the consumer price index in June as demand in the economy remains week, Economy Minister Maxim Reshetnikov told a conference on Wednesday.

Central Bank Governor Elvira Nabiullina, who spoke at the same conference, said her bank would cut rates as inflation slows. The next planned board meeting where the central bank can cut its key rate from 9.5% is scheduled for July 22.

Capped by a rapid recovery in the rouble and a drop in consumer demand, annual inflation has been slowing recently from the 17.83% it reached in April – its highest since early 2002.

Russia recorded weekly deflation in May for the first time since August 2021 after weekly inflation spiked to 2.22% in early March following the beginning of what Russia calls a “special military operation” in Ukraine on Feb. 24.

Prices on nearly everything, from vegetables and sugar to clothes and smartphones, have risen sharply since Feb. 24 as Russia encountered logistics disruptions and increased volatility in the rouble.