Inflation in the Central Federal District rose to 7.5 percent in February 2024, following a 7.3 percent increase in January. Across Russia as a whole, annual inflation stood at 7.7 percent in February, up from 7.4 percent in January. This assessment comes from the chief economist of the district’s Main Directorate of the Central Bank, who spoke to socialbites.ca.
The primary drivers behind the price uptick in Central Russia are higher production costs for several non-food goods and persistent strong demand. In contrast, in the Moscow region, annual inflation in February did not follow the same pattern and declined slightly to 7.1 percent from 7.2 percent in January, according to the same economist.
Prices have risen more slowly on an annual basis partly because more fruits were available in the Moscow region and because government measures aimed at stabilizing prices have had an effect. The official noted that the authorities’ actions in the chicken egg market helped correct prices after peaks seen in earlier months. As a result, chicken egg prices in the Moscow region increased at a slower pace in February compared with January.
The economist also highlighted that orange supplies in the Moscow region grew due to higher imports from supplier countries. Consequently, orange prices in February rose more slowly year over year than in the previous month.
There was also a slowdown in the annual rise for excursion services in the Moscow region. In February 2023, demand for holidays in Russia surged because foreign travel options were limited, which pushed prices up. By February 2024, that spike was absent, contributing to more modest year-over-year growth in domestic sightseeing and trips to popular destinations along the Black Sea coast.
Looking ahead, the Central Bank’s projections suggest that, given current monetary policy, the national inflation rate could ease to about 4 to 4.5 percent in 2024 and remain near 4 percent in the ensuing years.
Historically, policy decisions have kept the key rate elevated to manage inflation expectations. The central bank has emphasized that inflation dynamics will depend on supply conditions, fiscal measures, and external price movements, all of which influence annual price growth across regions.