Forecasts for inflation in Russia point to a rate hovering around 5 to 5.5 percent by the end of the coming year, according to a briefing shared with socialbites.ca. The projection comes from Maxim Petronevich, who leads the macroeconomic and regional analysis and forecasting center at Rosselkhozbank. The assessment emphasizes that such a pace would depart from the Central Bank of Russia’s (CBR) 4 percent target for the end of 2024 and suggests a more cautious path ahead for the economy.
In the view presented, achieving a 4 percent to 4.5 percent inflation by year-end 2024 would require a notably abrupt slowdown in price growth from the start of the year, something Petronevich indicates is not currently supported by existing indicators. While monthly inflation could crest in January 2024, the annual rate would likely peak later, with a true deceleration taking shape only in the second quarter. This outlook underlines the fragility of the target in the face of ongoing price pressures and macroeconomic dynamics.
Petronevich noted that the Central Bank’s policy stance on the key rate now hinges heavily on incoming macroeconomic data. If price increases fail to ease at the start of the year and the factors feeding inflation remain potent, the bank might proceed with another rate increase at the next policy meeting in February. Contributors to this potential tightening include rising wages and retail activity, ongoing lending growth, a weaker ruble, and persistent inflation expectations among the population.
Beyond the level of inflation, the predictability of inflation is highlighted as a crucial factor. If inflation stays within a 6-8 percent corridor, the precise rate may be less critical than the ability to keep inflation steady and anchored. The analysis argues that achieving a 4-4.5 percent target should not become an objective in isolation. Should the early months of 2024 prove slow in delivering a downward shift in monthly inflation, this should not inflict irreparable harm on the Russian economy. A core priority remains preventing the 4 percent target from coinciding with divergent movements in prices and demand across goods and services, especially when policy effects might lag. The emphasis is on sustained, broad-based stability rather than a single milestone. (Attribution: Petronevich via socialbites.ca, as cited by market analysts.)
Looking further ahead, the Central Bank had projected inflation to land in the 5.0 to 6.5 percent range by year-end 2023. On December 15, officials approved another 100 basis point hike, lifting the key rate to 16 percent, a move framed as a response to persistent inflationary pressure. This stance reflects ongoing vigilance about price dynamics and the ability of policy tools to influence demand and expectations. (Attribution: official briefings summarized for market observers.)
Former Deputy Governor of the Central Bank, Zabotkin, did not rule out the possibility of future rate cuts in 2024, signaling that policy normalization could accompany inflation stabilization if conditions warrant. The conversation around rate direction remains sensitive to shifts in inflation momentum, currency movements, and the broader macroeconomic landscape, with stakeholders watching how these elements interact under the policy framework. (Attribution: agency commentary compiled from central bank communications.)