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Finance Ministry says Russia’s inflation may drop below 11% in 2015

May 14, 2015, 20:26 UTC+3
Russia’s consumer price growth has slowed in the past few weeks amid easing geopolitical tensions, rising world oil prices and the appreciating ruble
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©  TASS/Artiom Geodakyan

MOSCOW, May 14. /TASS/. Russia’s inflation may drop below the forecast level of 11% in 2015, Deputy Finance Minister Maxim Oreshkin said on Thursday.

Russia’s consumer price growth has slowed in the past few weeks amid easing geopolitical tensions, rising world oil prices and the appreciating ruble.

"The situation is developing in line with the Finance Ministry’s forecast. Our forecast has been at the level of 11% for quite a long time now. At the same time, we do not rule out that the final figure may drop closer to 10.5%," the deputy finance minister said.

"In our estimates, the 12-month change in the CPI [consumer price index] may fall to the range of 15.8-16% in May. De-facto, the current week data suggest the price growth has actually stopped," he added.

The Russian government’s decisions to restrict budget spending growth and keep public sector wage increase on hold in 2015 contributed to the downside inflation trend, the deputy finance minister said.

"Such uneasy steps in the fiscal policy were taken to give the Central Bank of Russia greater flexibility in monetary policy. The main aim is to ensure necessary structural conditions for investment activity recovery, including measures to make business more profitable and reduce funding costs," the deputy finance minister said.

As Russia’s Central Bank lowers its inflation forecast for the next 12 months, there will be more grounds for the regulator to further reduce its key rate currently at 12.5%, the deputy finance minister said.

Data released by Russia’s Federal Statistics Service (Rosstat) show that inflation has increased by 8.1% since the beginning of the year to May 12 compared with 4.2% in the same period last year.

Measured on an annual basis, Russia’s inflation equaled 16.3% as of May 12, 2015. Inflation reached its peak of 16.9% in March this year.

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