Consumer Prices: A Lengthy Disinflation Period

Monitoring of Russia's Economic Outlook. Moscow. IEP. 2019, No. 17, pp. 5-7

3 Pages Posted: 27 Dec 2019

See all articles by Alexandra Bozhechkova

Alexandra Bozhechkova

Gaidar Institute for Economic Policy; Russian Presidential Academy of National Economy and Public Administration (RANEPA) - Institute of Applied Economic Research

Pavel Trunin

Gaidar Institute for Economic Policy

Date Written: December 6, 2019

Abstract

The Bank of Russia’s decision to reduce the key rate by 0.50 pp to 6.5% was caused by an inflation slowdown to 3.8% in October 2019 relative to October 2018, with a high probability of its continuing downward movement. In this connection, the Bank of Russia has revised its inflation projections for 2019 from 4.0–4.5% to 3.2–3.7%. It is expected that the annual inflation index in 2020 will amount to 3.5–4.0%, and then it will be hovering around its target level of 4%. Thanks to this year’s good harvest, a slow growth rate of domestic demand, and the ruble’s strengthening, inflation slowdown may become even more pronounced than the Bank of Russia is currently expecting it to be. These developments may once more prompt monetary policy easing before this year’s end.

Keywords: Russian economy, consumer prices, Bank of Russia

JEL Classification: E44, E52, E58

Suggested Citation

Bozhechkova, Alexandra and Trunin, Pavel, Consumer Prices: A Lengthy Disinflation Period (December 6, 2019). Monitoring of Russia's Economic Outlook. Moscow. IEP. 2019, No. 17, pp. 5-7, Available at SSRN: https://ssrn.com/abstract=3499505

Alexandra Bozhechkova

Gaidar Institute for Economic Policy ( email )

Gazetny pereylok 3-5
Moscow, 125993
Russia

Russian Presidential Academy of National Economy and Public Administration (RANEPA) - Institute of Applied Economic Research ( email )

Russia

Pavel Trunin (Contact Author)

Gaidar Institute for Economic Policy ( email )

Gazetny pereulok, 3-5
Moscow, 125993
Russia

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