Russian consumer prices dip for 11th straight week

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MOSCOW — Consumer prices in Russia fell for the 11th consecutive week, data published on Wednesday showed, as a strong rouble and sluggish consumer demand continue to push retail prices down.

Russia’s consumer price index dipped 0.03% in the week to Sept. 19, the same pace of decline registered a week earlier, the Rosstat federal statistics service said.

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Falling living standards in recent months have weighed on consumer demand, hitting retail sales and leading to an extended period of deflation over the summer.

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A separate set of Rosstat data published on Wednesday also showed the producer price index, a measure of how much suppliers charge clients, falling to 3.8% on annual terms in August, down from a reading of 6.1% in July.

Inflation had surged earlier this year after Moscow launched what it calls its “special military operation” in Ukraine, prompting the central bank to hike rates to 20% in February in a bid to tame the pace of rising prices.

Strict capital controls have since ushered in a period of extended stability for the rouble – which has traded around 60 to the U.S. dollar since late July – and the central bank last Friday cut rates back to their February level of 7.5%.

High inflation has for years been a top concern for Russian households as it dents their spending power and eats into living standards. Poverty rates are relatively high in Russia and surveys show more than half of all households have no savings.

Since the start of the year consumer prices have risen 10.23%, Rosstat said. At the same point in 2021, year-to-date inflation was running at 5.32%.

The central bank targets annual inflation of 4%. At its meeting last Friday, when it reduced rates by 50 basis points to 7.5%, Governor Elvira Nabiullina hinted that the regulator could be finished with its rate-reduction cycle after six cuts so far this year. (Reporting by Reuters Editing by Gareth Jones)