The Federal Statistics Services reports that within 2017, the consumer prices in Russia were up 2.5%. It's a record low inflation in Russia's recent history, according to the experts specifying in their latest bulletin on the current trends in the Russian economy.
The analysts believe that throughout 2017, the consumer inflation fell from 5% to 2.5% on an annualized basis. Between January and December of the last year, the consumer inflation in Russia averaged 3.7%.
According to the experts, there were several factors at play in holding back the inflation: the Russian economy took a long time to recover from the recession while the Bank of Russia implemented a number of deliberate steps to curb the inflation. At the same time, slow increase in prices resulted in retail sales recovery: +1.2% in 2017 after -10% in 2015 and -4.6% in 2016.
The experts note that the record low inflation in 2017 resulted from the slowing down of price increase for groceries (+1.1% in 2017 versus +4.6% in 2016) and for other consumer goods (+2.8% versus +6.5% in 2016). The prices for services, a sector that traditionally responds to economic downturns with a delay, increased more in 2017 (+4.4% on an annualized basis).
As the ruble appreciated, the prices for imported meat fell by 3Q 2017, reaching the level of USD 3,200 per tonne. In the meantime, the share of imports in the meat and poultry category of retail, which declined in 2014-2015 as a result of the ruble devaluation, has been stable since early 2016 at around 10%, a record low level for the past several years, the analysts specify.
According to the analysts, November-December 2017 saw the so-called perceived inflation, an indicator estimated by surveying the public, go below 11% for the first time since experts started tracking it in April 2010, while the inflation rate people expect to see over the next 12 months fell below 9%. In other words, the consumer prices inflation perceived and expected by the population also hit all time lows, despite the fact that they remain significantly different from the official indicators (about 8 percentage points in 2H 2017).
For more see the bulletin Consumer Prices Trends: 2017.
For the other bulletins on the current trends in the Russian economy, please see Publications.