Ministry: Russian inflation rises to 4.7% on year January 14

MOSCOW, Jan 21 (PRIME) – Russia’s annual inflation accelerated to 4.7% as of January 14 from 4.3% in 2018, the Economic Development Ministry said in a statement on Monday.

An increase of value-added tax (VAT) pushed inflation higher only moderately, the ministry said. “Judging by weekly data of the Federal State Statistics Service, based on an incomplete basket of goods and services, increase of VAT has a quite moderate influence on the price dynamics.”

The ministry said that the prices for the bulk of food fell compared to December, and vegetables are still charged 10% VAT instead of regular 20%.

In 2018, a 20% growth of consumer lending was one of the key factors accelerating inflation to 4.7% from 2.5% in 2017. “The situation which we see causes concerns in terms of people’s real income, with the dynamics hurt by rising interest payments.”

Another systemic factor for inflation was weakening of the ruble on the back of an oil price fall and capital outflow. The ruble lost 13% against the U.S. dollar and 8.2% against the basket of currencies of Russia’s trade partners.

The government inflation forecast for 2019 stands at 4.3%, the central bank prediction at 5.0–5.5%.

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