Econ Min says inflation in Russia to fall to 2.5–2.6% in January

MOSCOW, Jan 10 (PRIME) – Russia’s consumer price Inflation index growth will slow down to 2.5–2.6% in January and can fall further to 2.2–2.3% in January–March, the Economic Development Ministry said in a report on Friday.

“The dynamics of inflation and its components points to fundamental weakness of domestic demand, which is confirmed by the retail sales dynamics, car sales and weak dynamics of consumer imports in 2019,” the ministry said.

The ministry forecasts a 3% inflation in 2020.

In 2019, inflation stood at 2.2% excluding the factor of value-added tax (VAT) increase, the ministry said. “The increase of the base VAT rate from January 1, 2019 was the key factor accelerating inflation last year. Its contribution is seen at 0.8 percentage points, which turned out to be less than the initial assessment of the Economic Development Ministry of Russia, firstly due to the absence of secondary effects,” it said.

With VAT growth, inflation amounted to 3% in 2019.

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