The RBC published an opinion of Alexey Vedev, Doctor of Economic Sciences, Head of the Financial Studies Department at the Gaidar Institute, on the decline in consumer prices in Russia recorded by Rosstat for the first time since September 2022.

According to Rosstat, Russia recorded its first deflation in 2023 in the week of February 21 to 27. The decline in prices was insignificant, that is, -0.02% after growth of 0.06% a week earlier. The last weekly deflation was observed in the period from September 13 to 19, 2022, when it reached 0.06%, ending a two-month cycle of price declines. According to Rosstat, such price dynamics is atypical for February: there has been no deflation in that month for at least 10 years. According to the Ministry of Economic Development, the growth of prices slowed down to 11.01% in annual terms.

The deflation was driven by the fruit and vegetables prices, which fell by an average of 0.8%. Cucumbers dropped in prices most of all: by 7.6%. Among other foods, buckwheat showed the greatest decline in prices. On average, it became cheaper by 1% in Russia, however, in some regions the figure reached -11.6% according to Rosstat. In the services sector, the largest decline in the cost was recorded for air travel in economy class, i.e., it was -3.7%.

Alexey Vedev believes that fruit and vegetables grew in prices significantly in the last months and therefore it is not surprising that there is such a “pullback” or correction, especially for cucumbers. It's just not the season for flights, he says.

Moreover, the weekly inflation embraces about 100 positions, while monthly inflation includes more than 550, the expert reminded. This means that the month-end data may be different, he believes. However, inflation is likely to really slow down in the future, given the effect of the high base in 2022. The annual growth rate can be reduced to 4-6% by the end of 2023, assumes Alexey Vedev.