Gas tariff hike accelerates rise in Russian weekly consumer prices

MOSCOW (Reuters) -Consumer prices in Russia rose sharply in the week to Dec. 5, driven by higher electricity and gas tariffs, data published on Wednesday showed, a little over a week before the central bank will meet on interest rates for the final time this year.

Russia’s consumer price index rose 0.58% in the week to Dec. 5, the Rosstat federal statistics service said, up from a 0.19% rise a week earlier. Since the start of the year, prices have jumped 11.71%, compared with 8.39% in 2021.

The government brought forward an indexation of utility prices to Dec. 1, 2022, from July 1, 2023, but promised that the next indexation would not take place before July 2024.

In the week to Dec. 5, Rosstat said electricity tariffs rose 8.6%, cold and hot water tariffs by 7.6% and 6.9% respectively, and gas tariffs climbed 6.5% higher.

Rosstat also observed a continued rise in prices for fruits, vegetables and air travel.

It said prices of cucumbers had risen 14.2% in the last week, with fruit and vegetable prices on average rising 2.9%. The cost of an economy class flight ticket was up by 5.7% from a week ago, after an 11% jump last week.

In a separate set of data, Russia’s economy ministry said that inflation was running at an annualised rate of 12.50% as of Dec. 5, up from 12.04% a week before.

The Russian central bank ended its rate-cutting cycle in late October, holding its key rate at 7.5%. Analysts widely expect the key rate to be kept unchanged at the central bank’s year-end board meeting on Dec. 16.

The central bank targets inflation at 4%, which it aims to achieve by 2024. It has forecast inflation to fall to 5%-7% next year.

High inflation has for years been a 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.

(Reporting by Alexander Marrow and Darya Korsunskaya; Editing by Toby Chopra, William Maclean)