Russian inflation decelerated in January for the first time in four months as food costs eased.
Consumer prices rose 6.1 percent from a year earlier compared with 6.5 percent in December, leaving inflation above the central bank’s target for a 17th month, the Federal Statistics Service in Moscow said today in an e-mailed statement. That matched the median estimate of 20 economists in a Bloomberg survey. Price growth quickened to 0.6 percent in the month from 0.5 percent, also in line with analyst forecasts.
Above-target increases in the cost of living have hurt the central bank’s ability to head off the worst economic slowdown since a 2009 recession. Policy makers led by Bank Rossii Chairman Elvira Nabiullina are targeting an inflation rate of 5 percent this year, after overshooting their 5 percent to 6 percent range in 2013. The central bank left its main lending rates unchanged in December for a 15th month.
“We expect inflation to decelerate mainly on slowing food prices and a weaker increase of regulated tariffs,” Vladimir Osakovskiy, the chief economist at Bank of America Corp. in Moscow, said by e-mail before the release. “A weaker ruble may support inflation in the coming months.”
The ruble is the third-worst performer this year among 24 emerging-market currencies tracked by Bloomberg, losing 5.3 percent against the dollar.
Bank Rossii, which is preparing to begin formally targeting inflation in 2015, has reduced its interventions in the currency market even as the ruble has come under pressure after the U.S. cut back monetary stimulus and economic growth slowed in China.
Inflation expectations were “fairly negative” in December, the central bank said Dec. 19, citing a survey of 2,000 adults across Russia conducted by the Public Opinion Foundation.
The ruble’s depreciation may start having an inflationary effect in February, according to Tatiana Orlova, a senior economist at Royal Bank of Scotland Group Plc.
“While previously the target of 5 percent seemed totally realistic, the sharp ruble weakening in January makes achieving it more difficult,” Orlova said by e-mail. “It must have fueled inflationary expectations and will force sellers of imported goods to rewrite their price tags.”
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