Russia: December’s inflation marks weakest level in over two years
Latest reading: Consumer prices increased 5.6% in annual terms in December, following a 6.6% increase in the prior month and surprising analysts to the downside. Moreover, December’s reading was the weakest since August 2023.
Relative to the previous month’s data, there were milder price pressures for non-food goods (+3.0% on a year-on-year basis vs +3.5% in November), food and non-alcoholic beverages (+5.2% vs +7.5% in November) and services (+9.3% vs +9.4% in November).
Meanwhile, core consumer prices were up 5.4% on a year-on-year basis in December, following a 6.1% increase in the prior month.
Lastly, consumer prices increased 0.32% in December on a month-on-month basis, following a 0.42% increase in the prior month.
Panelist insight: Commenting on the outlook, EIU analysts stated:
“We expect inflation to ease […] in 2026 as the economy slows and interest rates remain high. Although there is some evidence of inflationary pressure at the start of the year from VAT increases, inflation will end the year […] only slightly above the CBR’s 4% target, pulled down by weaker demand over the year. […] Risk remains to the upside, with inflation expectations still high, a weakening rouble and tight labour markets, as well as ongoing Ukrainian strikes on hydrocarbons infrastructure.”