Banker: Russian inflation will be about 3% in early 2018 – economy continues to grow despite US sanctions

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December 16, 2017 – Fort Russ News – Paul Antonopoulos

MOSCOW, Russia – Chairperson of the Bank of Russia Elvira Nabiullina said on Friday that inflation in Russia will be about 3% in early 2018 and reach the target of 4% by the end of next year.

“Inflation can be about 3% in first months of 2018. According to our estimate, inflation will closely approach 4% in the second half of the year as influence of temporary factors of this year will fade away,” the banker said.

“The success of our agriculture played the key role in such a significant reduction in inflation: the annual increase in food products in November was only 1.1%,” she said.

“The effects associated with the a big harvest of 2017 will gradually be exhausted. In the first half of 2018, this factor will continue to affect the level of annual inflation, it will be completely exhausted only in the third quarter,” Nabiullina added.

“According to our estimate, the effect of ruble appreciation on inflation in 2017 is within 1% or slightly less than 1%; [the effect of] harvest is slightly below 0.5%,” the banker said.

Ruble appreciation is still restricting inflation and its effect will be exhausted in early 2018, Nabiullina noted.

“Ruble appreciation is one more factor that continues restricting inflation so far. It largely occurred in the first half of this year. Its effect has almost completely reflected in prices and will be fully exhausted in early 2018,” Nabiullina said.

This demonstrates that despite the US-led sanctions against Russia, the economy continues to boom and not be affected.

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