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UPDATE 1-Russia report sees inflation peaking at 7.7-7.9 pct in June
June 18, 2014 / 2:06 PM / 3 years ago

UPDATE 1-Russia report sees inflation peaking at 7.7-7.9 pct in June

(Adds more on inflation)

MOSCOW, June 18 (Reuters) - The Russian central bank expects consumer price inflation to peak at between 7.7 percent and 7.9 percent in June before slowing to 6.8-7.0 percent by September, according to a policy document published on Wednesday.

The inflation rate is significantly higher than the central bank’s target of a 5 percent rise in consumer prices, with the increase spurred by a weaker rouble and an asset selloff on emerging markets earlier this year.

The weaker rouble has contributed 0.8 percentage point to the rate of inflation since the last months of 2013, the bank said in its quarterly report on monetary and lending policy.

“According to estimates, the effect of the volatility in the rouble rate on inflation .... will be exhausted in September,” it said.

This, and the traditional seasonal fall in fruit and vegetable prices, should ease inflationary pressures, the central bank said, bringing the rate down to 6.8-7.0 percent by September.

The bank also said it expected quarterly GDP growth to come in at around zero for the second quarter, excluding seasonal factors.

“In the second half, in the absence of significant external shocks, the GDP growth rate will show weak positive dynamics,” the central bank said.

For the whole of 2014, the central bank forecast GDP growth of 0.4 percent.

Reporting by Oksana Kobzeva and Lidia Kelly; Writing by Alexander Winning and Lidia Kelly; Editing by Kevin Liffey

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