MOSCOW, June 2 (Reuters) - Russia’s consumer inflation accelerated again in May and is on track to speed up further in the coming months, central bank analysts said in a report on Wednesday, days before the bank’s rate-setting meeting.
Inflation in Russia has been on the rise since early 2020, boosted by a weaker rouble and globally higher food prices as well as the central bank’s decision to cut the key rate to a record low of 4.25% in the face of the COVID-19 crisis.
“Inflation in May has returned on the upward trend, which may remain in place by autumn,” the central bank said in a report on trends.
Annual inflation likely reached 5.7%-5.9% in May, after slowing to 5.5% in April, staying far above the 4% target that it will reach only in the middle of 2022, the central bank analysts said.
Inflationary pressure will also remain elevated in the coming months, including in the consumer sector, the analysts said.
High inflation has prompted the central bank to raise rates twice this year, last to 5% in April, making lending more expensive. It is widely expected to hike the key rate to 5.25% next week, a Reuters poll of analysts showed.
“The current monetary conditions still support an active growth in banks’ lending in all segments,” the central bank analysts said.
They also said the Russian economy was likely to recover to pre-pandemic levels in mid-2021 after its sharpest contraction in 11 years in 2020, echoing an economy ministry forecast. (Reporting by Andrey Ostroukh; editing by John Stonestreet and Steve Orlofsky)
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