Disinflationary risks to prevail in Russian economy over short term – Central Bank

TASS Russian News Agency | Feb 14, 2020 at 12:04 PM

/Update/

MOSCOW, February 14. /TASS/. Disinflationary risks in the Russian economy are still higher than pro-inflationary ones as regards the short term, the Bank of Russia says on Friday in its comment on consumer price dynamics.

"According to assessment of the Bank of Russia, disinflationary risks still prevail over proinflationary ones in respect of the short term. Annual inflation in such environment, considering the pursued monetary policy, will be 3.5-4% as of 2020 year-end and will remain around 4% later on, the regulator said.

Annual inflation was 2.4% in January 2020, 0.6 percentage point down against last December, the regulator said.

The decline was largely related to a statistical effect of withdrawing the price hike in January 2019 linked to the VAT rate growth from the calculation, the Central Bank noted. "Further offer growth on individual food markets contributed to slowdown of the annual growth rate of foods prices with preserved low monthly uptick for the same (with the seasonal adjustment)," the regulator noted.

The ruble strengthening in 2019 limited the price uptick for goods with a high import component and for goods competing with import, the Central Bank noted. Modest demand continued influencing on inflation.