Russia now seeing decrease in annual inflation, still has sufficient reserves to ease monetary policy - Reshetnikov
MOSCOW. Feb 12 (Interfax) - Russia saw a certain rise in inflation at the beginning of the year after the VAT rate was raised and the increase in fruit and vegetable prices was postponed from December to January, while annual inflation has now begun to decrease, a trend which still continues, Economy Development Minister Maxim Reshetnikov said at a meeting of the State Duma Economic Policy Committee on Thursday.
He said that the Central Bank of Russia still had a sufficient reserve to ease monetary policy.
"Inflation slowed down at the end of last year thanks to the joint efforts of the Bank of Russia and the government, and, of course, thanks to the CBR's tough monetary policy. But I must point out that there was also a sort of postponement in the inflation which we expected in December, but saw in January instead," he said.
"The latest annual inflation figure now is 6.4% [from February 9], and this is decreasing a little. Since the beginning of the year there has been a certain surge in connection with VAT and the delay in food inflation, partly to January - fruit and vegetables decreased in price in December, and rebounded somewhat in January," the minister said.
"Going forward, we understand that it [inflation] will slow down and normalize, moving towards the target range. We can see this across all the trends," Reshetnikov said.
"On the whole, we can now see that there is a reserve which allows monetary conditions to continue easing," he said.
According to Rosstat, inflation was at 0.13% from February 3 to February 9, 0.2% from January 27 to February 2, 0.19% from January 20 to January 26, 0.45% from January 13 to January 19 and 1.26% from January 1 to January 12, the latter period almost twice as long as a regular week due to the New Year holidays.
Prices increased 0.2% from the beginning of the month to February 9, and 2.24% since the beginning of the year, compared to 1.5% in the same period of last year.
Weekly data for January and the beginning of February indicate that annual inflation slowed from 6.46% on February 2 to 6.36% on February 9 - but increased from 5.59% at the end of December - if calculated from weekly trends in accordance with the methodology followed by the CBR.
The CBR kept its forecast for inflation in 2026 at 4%-5% in December.
