Inflation risks in the Russian economy have “significantly increased” in the near future, said Central Bank head Elvira Nabiullina at a press conference on Friday.
According to her, inflation threats are being driven by rising fuel prices as well as the budget situation, with government spending this year potentially exceeding planned levels. The budget risk has “already materialized,” but “uncertainty remains regarding its scale,” Interfax quotes Nabiullina as saying.
In addition, inflation in June will be affected by “the recent spike in fuel prices,” she added. According to Rosstat, gasoline prices have been rising in retail for two consecutive weeks at a rate of nearly 1%, and since the beginning of the year they have increased by 6.6% — twice as much as during the same period last year.
“The rise in gasoline prices may also affect inflation expectations, as it is a very sensitive commodity for both individuals and companies,” Nabiullina said.
According to the Ministry of Economic Development, inflation has begun accelerating again since the start of summer after almost continuous deceleration over the past year. From 5.31% at the end of May to June 15, the growth rate of the consumer price index rose to 5.63%.
“This situation may limit the space for further key rate cuts,” Nabiullina warned.
At its meeting on Friday, the Central Bank reduced the rate to 14.25% per annum — a 0.25 percentage point cut, the smallest step in the last nine meetings where the regulator had been easing monetary policy.
In its forecasts for the current year, the Central Bank had projected an average rate of 14–14.5%, 8–10% for 2027, and a return to a neutral level of 7.5–8.5% in 2028. Given new conditions, the transition to a neutral rate may occur later, Nabiullina said.
