Inflation in Russia in October 2009

As of October results, inflation in Russia, as measured by the CPI, is zero again. Herewith, consumer prices in the country do not grow for three consecutive months, which has never been recorded before in the entire modern history of the country.

It is obvious that such a sharp slowdown in inflation in the last six months of 2009 was a consequence of the economic crisis, which resulted in a significant reduction in aggregate demand and downward pressure on prices. In addition, since the spring of this year, RUR was strengthening, encouraging cheaper imported goods.

Apparently, during November - December CPI in Russia will stay low. However, with the growth of budget expenditures and monetary supply recovery, inflation will gradually accelerate. At the same time, as of 2009 annual results, the CPI is unlikely to exceed 9-10%.

P.V. Trunin, PhD, Head of Laboratory of Monetary and Credit Policy