Bank of Russia revises annual inflation outlook to 4.2-4.7% at year-end

TASS Russian News Agency | Jun 14, 2019 at 11:49 AM

/Update/

MOSCOW, June 14. /TASS/. Annual inflation outlook has been revised down to 4.2-4.7% as at 2019 year-end against the background of completed transition of VAT increase into prices and remaining favorable environment, the Bank of Russia said after its Board meeting on Friday.

"In line with the pursued monetary policy, the Bank of Russia has lowered its end-of-year annual inflation forecast for 2019 from 4.7-5.2% to 4.2-4.7%. The revised forecast takes into account the completion of the VAT increase pass-through to prices (including the influence of secondary effects) and the preservation of relatively favorable external conditions and moderate dynamics of domestic demand. Moving on, according to the Bank of Russia’s forecast, annual inflation will stay close to 4%," the Central Bank says.

At the same time, "annual inflation slowdown is continuing. Annual consumer price growth rate declined in May to 5.1% (from 5.2% in April 2019) and reached an estimated 5.0% as of 10 June," the regulator notes. Seasonally adjusted monthly consumer price growth has remained close to 4," it adds.

"In May, households’ inflation expectations and business price expectations did not materially change and remain elevated," the Bank of Russia noted.

The Bank of Russia made a decision earlier today to lower the key rate to 7.5% per annum, for the first time since March 2018.