Inflationary expectations of Russians for the year ahead in October rose by 1.3 percentage points compared with September, to 13.6%, according to the materials of the Central Bank. The indicator returned to its highest values over the past five years.
“The median estimate of inflation expected in the next 12 months was 13.6% (+1.3 percentage points to September). The inflation observed by the population also increased in October, but remained slightly below the levels of July-August 2021. Its median estimate was 16.3% (+0.7 pp). Estimates of expected inflation increased to a greater extent among respondents without savings, ”says the document (.pdf).
According to the forecast of the Bank of Russia, the annual inflation by the end of 2021 is expected in the range of 7.4-7.9%. “Taking into account the ongoing monetary policy, annual inflation will decrease to 4.0-4.5% in 2022 and will remain close to 4% in the future,” the Central Bank said.
In the second half of October, annual inflation accelerated to 7.8%. The Bank of Russia Board of Directors decided to raise the key rate by 75 bp. etc., up to 7.5% per annum.
For more details on the Central Bank’s decision, see Kommersant’s article “We Have Long Rates”.
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