The Central Bank forecasts the key rate in the range of 6.5-7.1 at the end of the year%

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AK&M 23 July 2021 15:39

The Central Bank forecasts a key rate in the range of 6.5-7.1% by the end of the year. This is evidenced by the data of the medium-term forecast of the regulator, published following the meeting of the board of directors, which increased the key rate by 100 basis points to 6.5% per annum.

According to the forecasts of the Bank of Russia, inflation in the Russian Federation in 2021 will reach 5.7-6.2%. In 2022, inflation will be 4-4.5% and in the future will be near 4%.

Currently, inflation is higher than the forecast of the Bank of Russia. In June, the monthly seasonally smoothed growth rates of consumer prices slightly decreased compared to May, but remain high.

Annual inflation increased to 6.5% (after 6% in May) and remained at the same level on July 19. The indicators reflecting the most stable processes of price dynamics, according to the estimates of the Bank of Russia, are significantly higher than 4% in annual terms.

This is a reflection of the fact that the steady growth of domestic demand is outpacing the opportunities for expanding production in a wide range of industries. Against this background, it is easier for enterprises to transfer increased costs to prices, the regulator emphasizes.

Inflation expectations of the population continue to grow and have been near the maximum values for the last four years for more than six months. The price expectations of enterprises remain near multi-year highs.