Russian consumer price inflation posted 0.9% month on month and 7.4% year on year in January 2024, according to the latest data from RosStat. (chart)

Monthly price growth exceeded the market expectations (0.7% according to Interfax survey cited by Renaissance Capital), while annual reading remained at the same level as December 2023.

As followed by bne IntelliNews, inflation is in focus ahead of the Central Bank of Russia (CBR) policy meeting on February 16. In 2023 the CBR was forced to play catch up with persistently high inflation: in less than five months the key rate has more than doubled from 7.5% to 16%. 

As the price growth retreated to 7.4% y/y in December and 7.2% in mid-January, the analysts disagreed whether the disinflationary trend was stable. 

“On a seasonally adjusted basis, price growth accelerated to 0.6% in January from 0.5% in the previous month, but remained below August-November levels. The acceleration was largely determined by the dynamics of service prices, including the increase in prices of housing and utilities services (although the main indexation is scheduled for July). After a decline in 4Q23, petrol prices also resumed rising (+0.5% in January),” Renaissance Capital commented.

However, the analysts note that inflation expectations of the population (on the horizon of 1 year) in February decreased for the second month in a row, by 0.8 percentage points to 11.9%.

“This is lower than last February, although still above the levels that the Central Bank of Russia defines as normal,” RenCap analysts note.

RenCap believes that overall, the latest inflation data “will probably not support a softening of the CBR’sBank of Russia's rhetoric at the meeting this Friday February 16,” and expect the key rate to remain at 16% in line with the previously reported consensus.