Econ ministry sees risks of faster than expected inflation slowdown

MOSCOW, Oct 1 (PRIME) – The Russian consumer price inflation may slow down faster than provided in the Economic Development Ministry’s basic forecast of 3.8% in 2019 and at 3% in 2020 as crediting dwindles, the ministry said on Tuesday in a report.

“Slower growth of consumer lending coupled with a slowdown in other types of crediting will not be compensated by operations of the extended government and will lead to a further increase of the disinflationary trend, which means that the risks of a faster inflation slowdown later as compared with the ministry’s baseline forecast widen,” the report read.

Growth of the banking sector’s loan portfolio slowed down for a second month in a row in August, shrinking to 9.9% in annual terms after showing down to 10.4% in July and 11.1% in June.

“The growth slowdown in credit supply has become one of the key factors of cooling combined demand this year and a noticeable evidence of that is a fast reduction of inflation from the peak figure of 5.3% year-on-year in March to 3.9–4% year-on-year expected in September and to 3.6–3.8% year-on-year at the end of this year,” the report read.

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