Russia’s 2024 inflation to exceed government’s forecast after weekly jump

MOSCOW (Reuters) – Russian consumer prices jumped by 0.3% in the latest week, bringing the headline number to 7% since January, close to the official government forecast of 7.3% for the full year, statistical data showed on Wednesday.

The data suggested that inflation was still running high despite monetary tightening measures, such as the Oct. 25 interest rate hike to 21%, the highest level in over 20 years. Prices rose by 0.19% in the week before.

The data showed that spikes in prices for basic foods, such as butter and other dairy products, were driving the overall growth in prices. Prices for butter were up nearly 30% year-to-date, while prices for milk increased by about 12%.

The growth in butter prices has already prompted cases of theft in supermarkets across Russia, as the government turned to the United Arab Emirates and Turkey for butter imports in a move aimed at containing prices and calming consumers.

Meanwhile, Prosecutor General Igor Krasnov has launched an investigation into the alleged tactics of milk and dairy producers to orchestrate a surge in prices, vowing decisive measures to halt such practices.

The consumer price index rose 0.75% on a monthly basis in October after a 0.48% increase in the previous month. In year-on-year terms, inflation was 8.54%, down from 8.63% in September.

The central bank raised its inflation forecast to between 8.0% and 8.5% by the end of the year at the latest rate-setting meeting, while the government is still maintaining its forecast of 7.3%.