Inflationary expectations of Russians have become the highest in five years

Inflationary expectations of Russians for the year ahead in October increased by 1.3 percentage points compared with September, to 13.6%, according to the materials of the Central Bank. The indicator returned to its maximum values for the last five years. "The median estimate of inflation expected in the next 12 months was 13.6% (+1.3 p. p. compared to September). Household observed inflation also increased in October, but remained just below July-August 2021 levels. Its median estimate amounted to 16.3% (+0.7 percentage points). Estimates of expected inflation mostly increased among respondents without savings," reads the document (.pdf). According to the forecast of the Bank of Russia, the annual inflation rate by the end of 2021 is expected to be in the range of 7.4-7.9%. "Taking into account the ongoing monetary policy, the annual inflation will decrease to 4.0-4.5% in 2022 and in the future will be near 4%," the Central Bank believes.