Russia | Persistent price pressures justify front-loaded hikes
The authorities’ decision to eschew lockdowns in the last 12 months has led to a steady return of mobility and economic activity to pre-pandemic levels. Recent economic indicators corroborate the narrative of a V-shaped recovery.
What you will learn:
- In May, headline inflation increased to 6.0% y/y following a short-lived deceleration in April. We have raised our end-year CPI forecast to 5.5% y/y, which is higher than both the government’s and CBR forecasts.
- Inflationary pressures continue to increase. The CBR has already hiked 75bps since March and brought its policy rate up to 5.0%.
- We believe the CBR has a reason to continue front-loaded monetary tightening. Another 50bp hike seems appropriate at the Friday policy meeting.
Tags:
Related Services
Post
Easing financial conditions offer CRE some respite
Our measure of financial conditions has become less restrictive in the US and started to loosen in the eurozone and the UK, reflecting investors' expectations that interest rates have peaked. This should aid the outlook for commercial real estate (CRE) on the margins, although the scale of past rate hikes, sluggish economies, and structural headwinds mean the sector still confronts challenging fundamentals.
Find Out More
Post
Eurozone key themes 2024 – A fragile recovery will gain impulse
After a year of stagnating activity, the eurozone economy will continue to struggle to gain traction in the near term given multiple headwinds. But we expect a gradual recovery in 2024 that will gather momentum as consumers regain some of their lost purchasing power and financial conditions ease.
Find Out More