MOSCOW, August 5. /TASS/. Signs of stabilization in the fuel market emerged in mid-July, driven in part by government measures, according to the summary of the Bank of Russia's key rate discussion.
"Moreover, signs of stabilization in the fuel market emerged in mid-July, in part due to government measures. Participants agreed that a significant portion of the direct impact of the fuel price increase on current inflation has already been realized," the regulator stated.
According to the summary, the indirect effects of rising fuel prices are tied to the pass-through of increased transportation and production costs into the pricing of a wider range of goods and services, alongside the reaction of inflation expectations. Unlike the direct impact, these secondary effects may manifest with a lag and remain more protracted over time. High-frequency data for July already pointed to this trend, the Central Bank added.
Inflation expectations among both households and businesses increased significantly in July. Surveys indicated that the population attributed future price increases to rising fuel costs, while enterprises blamed the resulting growth in expenditures, the regulator concluded.