(Reuters) – Inflation in Russia quickened in October, data from the state statistics service Rosstat showed on Friday, justifying the central bank’s decision to hike interest rates to 15% last month as it tries to bring price rises under control.
The central bank has now raised rates by 750 basis points since July, including an unscheduled emergency hike in August, under pressure from a weak rouble, tight labour market and strong consumer demand.
In October, annual inflation stood at 6.69% year-on-year, up from 6.0% a month earlier and in line with expectations of analysts polled by Reuters. The central bank sees inflation ending this year at 7.0%-7.5%, well above its 4% target.
On a monthly basis, the consumer price index (CPI) rose 0.83% in October after a 0.87% increase in September, the data showed, coming just below analysts’ expectations of a 0.9% increase. That was the second-fastest monthly increase in 18 months.
Central Bank Governor Elvira Nabiullina this week said inflation pressure had peaked in the third quarter, but will only start decreasing next spring.
The bank needs its monetary policy, which operates with a lag, to help cool price rises, especially as prices rose sharply in early November.
Days after October’s rate hike, between Oct. 31 and Nov. 7, consumer prices jumped 0.42%, separate Rosstat data showed.
Russian households regularly cite inflation as a key concern, with many having no savings after a decade of economic crises, while rising prices dragged living standards down across the country.
Rosstat gave the following details:
RUSSIAN CPI Oct 23 Sept 23 Oct 22
Mth/mth pct change +0.83 +0.87 +0.18
– food +1.35 +0.86 +0.28
– non-food +0.55 +1.09 +0.04
– services +0.48 +0.61 +0.24
Y/Y pct change +6.69 +6.00 +12.63
Core CPI y/y pct change +5.50 +4.40 +16.16