Russian consumer prices decline for third week running

MOSCOW (Reuters) – Russia’s consumer price index (CPI) fell 0.12% in the week to June 17, down for a third week in a row after a massive spike in March, providing the central bank with more room to cut rates to limit the economic downturn this year, data showed on Wednesday.

So far this year, consumer prices in Russia rose 11.51%, data from the federal statistics service Rosstat showed.

In a separate set of data, the economy ministry said annual consumer inflation slowed to 16.42% as of June 17, down from 16.69% a week earlier.

Capped by a rapid recovery in the rouble and a drop in consumer demand, annual inflation has been slowing recently and, in weekly terms, the CPI index declined 0.14% in the preceding week.

Russia recorded its first weekly deflation in May for the first time since August 2021 after weekly inflation spiked to 2.22% in early March following the beginning of what Russia calls a “special military operation” in Ukraine on Feb. 24.

Inflation is slowing even after the central bank cut its key interest rate to the pre-crisis level of 9.5% earlier in June and kept the door open to further easing, noting uncertainty related to external risks such as the Western embargo on Russian oil.

Prices on nearly everything, from vegetables and sugar to clothes and smartphones, have risen sharply since Feb. 24 as Russia encountered logistics disruptions and increased volatility in the rouble.

(Reporting by Reuters; Editing by Mark Heinrich)