CPI Monitor: Unexpected overture

Macroeconomics

Inflation accelerated to 0.19% WoW over the September 24-30 period vs. 0.06% WoW the previous week. The growth was fueled by a seasonally atypical and sharp increase in airfares and a slowing of the seasonal decline in vegetable prices. Adjusted for volatile items, stable inflation components remain high amid persistently overheated demand. The new draft Budget Law for 2025 envisages not only a disinflationary reduction of the deficit, but also forced growth in the minimum wage. The latter will likely trigger an increase in household income and may provoke active measures by the CBR. In 2024, inflation may slow to only 7.5% YoY.