Russia sees 1% January inflation, annual falls to single figures – Rosstat

MOSCOW. Feb 5 (Interfax) – Russia had 1% inflation in January 2016, compared with 0.8% in both December and November 2015, the Federal State Statistics Service (Rosstat) said.

Analysts told Interfax in a consensus forecast at the end of January that they thought inflation for the month would be 1%.

Inflation soared to 3.9% in January 2015 – the highest monthly figure since 4.1% in February 1999 – due to the ruble’s sharp devaluation in December 2014. According to Rosstat’s data, inflation in annual terms fell to 9.8% in January 2016, from 12.9% in December last year.

Inflation in annual terms is now down to single figure for the first time since the middle of December 2014. The last time inflation in annual terms was lower than 10% was December 17, 2014, just as the ruble plummeted in value, fuelling consumer price growth in annual terms, which peaked at 16.9% in March 2015, falling to 12.9% in December.

Inflation in annual terms is now more than 1 pp below the Central Bank’s key lending rate, which is currently 11%.

The core or underlying inflationary index, which excludes short-term irregular price changes caused by various factors of an administrative, once-off and seasonal nature, was 100.8% in January 2016, up from 103.5% in January 2015, and in annual terms it was 110.7% (114.7%).

In January 2016, food and drink prices rose 1.2% (5.7% in January 2015) or, minus fruit and vegetables they grew 0.6% (3.7%).

Non-food prices went up 0.7% (3.2%) and services rose 1% (2.2%).

Fruit and vegetable had a market effect on January inflation, with cucumbers going up 15.2% in price, pears, grapes and bananas – 9.4-14.2% and cabbage, tomatoes and carrots – 6.7-8.9%. However oranges fell 4.3% in price.

Fish prices went up 3%, but there were drops of 0.1-0.6% for pork, poultry, rice, buckwheat and salt.

Gasoline prices fell 0.4%.

Municipal electric transport fares rose 7.6%, commuter train fares – 6.9% and municipal bus fares – 5.4%.

Housing and utility services rose 0.4% in price.

The Central Bank said in the middle of January that inflation might be 9.6%-10% for the month. On January 29, in a commentary to its latest interest rate decision, it said annual inflation might fall to 8%-9% this quarter, although there was a danger that inflation would accelerate if oil prices stayed low for a lengthy period.