Russian May inflation accelerates to 6.0%, above forecast

(Corrects month to May from June throughout)

FILE PHOTO: A vendor hands over Russian rouble banknotes to a customer at a street market in Omsk, Russia March 31, 2021. REUTERS/Alexey Malgavko

MOSCOW (Reuters) – Russia’s annual consumer inflation accelerated to 6.0% in May, overshooting expectations and adding arguments for tighter monetary policy days before the central bank’s rate-setting meeting, data showed on Monday.

Inflation, the central bank’s main area of responsibility, accelerated to its highest since October 2016 when the central bank’s key interest rate was at 10%.

The data from the statistics service Rosstat comes ahead of the bank’s board meeting due on Friday where it is expected to raise the key rate for the third time in a row, by 25 or even 50 basis points from 5%.

The year-on-year increase in the consumer price index was above analysts’ expectations for a rise of 5.8% in a Reuters poll.

Central bank analysts predicted May inflation at 5.7%-5.9%, warning it was on track to speed up further in the coming months.

The central bank targets annual consumer inflation of 4%. It overshot the target in late 2020 amid global inflation and as the weaker rouble filtered into prices in Russia.

Rosstat gave the following details:

RUSSIAN CPI May 21 April 21 May 20

Mth/mth pct change +0.74 +0.58 +0.27

– food +0.96 +0.75 +0.16

– non-food +0.74 +0.66 +0.25

– services +0.44 +0.22 +0.46

Y/Y pct change +6.02 +5.53 +3.02

Core CPI y/y pct change +6.04 +5.47 +2.85

NOTE – For key Russian indicators click here.

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