MOSCOW, August 14 Persistent inflationary pressure in Russia in July remained almost unchanged from June, and further tightening of monetary conditions is required to reduce inflation, the Central Bank said.
«Persistent inflationary pressure has remained virtually unchanged from the previous month, remaining at an elevated level and not yet showing a steady decline. In order for inflation to begin to decline again, additional tightening of monetary conditions is required,» the information and analytical commentary «Consumer Price Dynamics» says.
The Central Bank indicates that consumer prices rose by 1.14% in July (0.64% in June). Adjusted for seasonality, the annual price growth was 16.1% (9.3% in June), mainly due to the indexation of utility tariffs. Annual inflation rose to 9.13% in July from 8.59% in June, but excluding the indexation of utility tariffs, the annual price growth remained virtually unchanged and amounted to 9.08% (9.13% in June).
«The stable components of inflation in July were close to June values, remaining high. The main inflationary factor is high domestic demand, which continues to outpace the ability to expand supply,» the material notes.
«Tightening of monetary policy will limit excessive expansion of domestic demand and its inflationary consequences. Taking into account the current monetary policy, annual inflation, according to the Bank of Russia's forecast, will amount to 6.5-7% in 2024, decrease to 4-4.5% in 2025 and will remain close to 4% in the future,» the regulator concludes.
On July 26, the Bank of Russia raised the key rate for the first time this year — by 2 percentage points, to 18% per annum. This is the maximum rate since the beginning of April 2022, when it was at 20% per annum. In its statement, the Central Bank then noted that in order for inflation to begin to decline again, additional tightening of monetary policy is required. And he indicated that he would assess the advisability of further raising the key rate at upcoming meetings.