Population no longer expects decline in inflation

13 february 2019

The Analytical Center issued a regular bulletin on current trends in the global economy "Consumer Price Dynamics: 2018 Results".

The authors of the bulletin state that consumer inflation in 2018 accelerated to 4.3% after 2.5% a year earlier. As expected, it was not possible to repeat the favorable pricing conditions of 2017. The food inflation accelerated markedly, the increase in prices for non-food products also surpassed the previous year. The acceleration of consumer inflation in the second half of 2018 led to a noticeable decrease in the growth rate of real wages and, accordingly, retail turnover.

According to analysts, the main drivers of consumer inflation may include the ruble weakening, the expectation of an increase in the VAT rate to 20%, a rise in excise taxes on fuel, and the exhaustion of excess supply in the domestic market for agricultural products.

Experts note that the population no longer expects a decrease in inflation in the future for the first time in the last four years.

The authors write that inflation in the service sector slowed down for the fourth year in a row. This was due to the slowdown in the growth of prices for passenger transport and communication services. At the same time, the rise in prices in the field of foreign tourism has noticeably accelerated.

For details see the bulletin "Consumer Price Dynamics: 2018 Results".

For other bulletins on the current trends in the Russian economy, see Publications.