Cbank says Russia 2016 inflation falls in part on temporary factors

MOSCOW, Jan 18 (PRIME) -- The fall of Russia’s inflation to 5.4% in 2016 from 12.9% in 2015 partially happened due to temporary factors, like strengthening of the ruble thanks to higher oil prices and a consistent interest of foreign investors in local assets, the central bank said in a research note published on Wednesday.

The impact of the temporary factors is also noticeable as core inflation is higher than the general consumer price growth. “The abating influence of the restraining one-time factors may slow down the fall of inflation,” the regulator said.

Inflation risks are connected to the fact that there is no tendency for lower inflationary expectations, mainly due to a strong price growth for some types of food – dairy products in the first place – on the background of unfavorable conditions on the world markets.

Still, maintenance of the moderately tough monetary policy will limit the risks and ensure a consistent decrease of inflationary expectations and a stable trend for inflation to fall to 4% by the end of 2017 and to stay close to the level, the research note read.

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