UPDATE 2: Russian cbank estimates annual inflation at 7.3% in July

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MOSCOW, Aug 3 (PRIME) – Russia’s annual inflation amounted to 7.3% in July and is likely to fall by 5–6% by the end of 2016, the central bank said in a statement on Wednesday.

“The Bank of Russia expects that annual inflation will slow down to 7.3% in July taking into account the fact that a rise in utility tariffs was lower on the year, expectations of a high harvest, and low consumer demand,” it said.

Consumer prices, particularly food prices, are likely to fall in August–September, the regulator said.

“The Bank of Russia maintains its baseline forecast, according to which annual inflation will slow down further to 5–6% by the end of the year,” the central bank said.

The Economic Development Ministry also said that Russia may be in for deflation in August and early September.

“Due to expectations of a good harvest, deflation is possible in some weeks of August and in early September,” it said.

The ministry confirmed its preliminary estimate of Russia’s inflation in July – 0.5-0.7% month-on-month and 7.2-7.4% year-on-year.

The Federal State Statistics Service said that Russian consumer prices fell 0.1% from July 26 through Monday, the country’s first deflation in five years, after three weeks of 0.1% inflation, while the price rise since January 1 amounted to 4%.

The service attributed deflation to fruit and vegetables, which became 3% cheaper on average in the reporting week.

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