According to the Federal Statistics Service, consumer prices increased by 5.4% in Russia in 2016, which was the record low level in the recent history of the country. The average annual inflation was 7.1% in 2016. The new Bulletin of Current Trends in the Russian Economy is focused on consumer price trends in 2016.
In 2014-2015 (like in 1998 and 2008), the ruble devaluation was followed by a dramatic rise in prices for goods and services that resulted in a strong depreciation of household income and a considerable fall in the real consumption in Russia: the real retain turnover shrank by 10% in 2015 and by additional 5.2% in 2016, according to experts. In H1 2015, the share of imported products in retail goods dramatically dropped due to the ruble devaluation in Russia that resulted in a lower inflation pressure of imports on consumer markets: for example, for the ‘meat and poultry’ category the share of import squeezed to 10% by H1 2016 that was 3-fold lower than for 2011-2012. Besides, the change of ruble prices for imports is behind the national currency devaluation that leads to lower dollar prices for imports: in H2 2014 the average price for imported meat was USD 4,400 per tonne, while in H1 2016 - USD 2,600 per tonne meaning that the price decline exceeded 40%.
Experts also noted that the increase in food prices was lower than the growth of the consumer price index in general in 2016, with slower consumer price inflation being largely caused by the three-fold decrease in the contribution of food prices to the price growth. Among food products, in average for 2016 prices increased significantly for fish and seafood - by 9.7%, and cereals and legumes - by 9.4%. In 2016, prices for milk and dairy products rose by 7.9%, alcohol products - by 7.3%, bread and bakery products - by 6.9%, which was lower than the 2015 indicators. Some important product groups became cheaper in 2016: meat and poultry - by 0.6%, and fruits and vegetables - by 0.1%.
Please see details in the Bulletin ’Consumer Price Trends: 2016 Results’.
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