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Market News | The decline in annual inflation accelerated in September, inflation expectations of the population decreased, but the return of inflation to 4% may require further tightening of the monetary policy - Bank of Russia analysts
The annual decline in inflation accelerated in September and household inflation expectations declined, but further monetary tightening may be needed to return inflation to 4%. - Analyst at a Russian bank • No The annual decline in inflation accelerated in September and household inflation expectations declined. However, monthly price growth (seasonally adjusted), including the sustainable component, remains high. • Most data and survey indicators for August and September point to a slowdown in domestic demand. • Investor interest in the stock market has recovered, but interest in bonds remains fragmented. Expectations of further increases in borrowing costs are forcing corporate issuers to enter the market more aggressively.
The new impetus for deflation requires a cooling of consumer demand compared to the levels reached by mid-year. Given the expected inflation-friendly impact of important one-off factors, the recovery of inflation to 4% in 2025 requires a gradual cooling of demand for loans in the retail and SME lending sectors. There is a shift towards a more frugal behavior pattern among the population.