Research Briefing | Jun 16, 2021

Russia | Persistent price pressures justify front-loaded hikes

Ipad Frame_Russia-Persistent-price-pressures-justify-front-loaded-hikes

The authorities’ decision to eschew lockdowns in the last 12 months has led to a steady return of mobility and economic activity to pre-pandemic levels. Recent economic indicators corroborate the narrative of a V-shaped recovery.

What you will learn:

  • In May, headline inflation increased to 6.0% y/y following a short-lived deceleration in April. We have raised our end-year CPI forecast to 5.5% y/y, which is higher than both the government’s and CBR forecasts.
  • Inflationary pressures continue to increase. The CBR has already hiked 75bps since March and brought its policy rate up to 5.0%.
  • We believe the CBR has a reason to continue front-loaded monetary tightening. Another 50bp hike seems appropriate at the Friday policy meeting.

Back to Resource Hub

Related Services

Post

Reciprocal tariffs another tool to extract policy concessions
Find Out More

Post

Don’t write the Eurozone consumer off just yet

Eurozone growth in 2025 will rely on consumers. There were positive signs in H2 last year, with consumers starting to deploy their real income gains and the impact of lower rates feeding through. However, we don't think solid H2 outturns signal a sustained increase in momentum. Instead, we expect spending growth to stabilise around the current pace, totalling 1.5% in 2025.

Find Out More