The conditions observed in February — April, 2015 of strengthening of ruble and considerable reduction of a consumer demand monthly growth rates of consumer prices decrease, outlined signs of stabilization of annual inflation. According to the forecast of Bank of Russia, delay of growth of consumer prices will happen quicker, than it was earlier expected. Annual inflation will decrease to level less than 8% in a year (April, 2016 by April, 2015) and to the target level of 4% in 2017. In process of further weakening of inflationary risks the Bank of Russia will be ready to continue decrease in key interest rate.
By estimates of Bank of Russia, as of April 27 annual rate of a gain of consumer prices will make 16,5%. The developed high level of annual inflation is mainly caused by action of short-term factors: weakening of ruble at the end of 2014 — January, 2015 and the foreign trade restrictions. At the same time in March-April monthly rates of a gain of consumer prices decreased, by estimates, on average to 1,0% after 3,1% in January — February, there were signs of stabilization of annual inflation. Decrease in a consumer demand in the conditions of reduction of the real income and the strengthening of ruble observed in recent months had the constraining impact on the prices. On this background there was a decrease in inflationary expectations of the population.
Delay of growth of consumer prices is also promoted by the developing monetary and credit conditions. Growth rates of money supply (Sq.m) remain at a low level. Under the influence of the decisions on decrease in key interest rate which are earlier made by Bank of Russia there is some correction of credit and deposit rates down. However their level remains high that, on the one hand, promotes preservation of appeal of savings in rubles, with another — along with toughening of requirements to quality of borrowers and to providing leads to delay of growth of crediting in annual expression.
Dynamics of the main macroeconomic indicators testifies to essential decrease in GDP in the I quarter 2015. Though factors of structural character continue to have the constraining impact on economic growth, release reduction more has now cyclic character. Testifies to it including the observed decrease in utilization of capacity and labor, and also some increase in unemployment rate. By estimates of Bank of Russia, fine tuning of labor market to new conditions happens generally due to reduction of wages and a part-time employment. Action of these factors along with reduction of annual growth rates of retail crediting will lead to further decrease in consumer activity. Reduction of investments into fixed capital will proceed that will be caused by preservation of high economic uncertainty, deterioration of financial performance of the companies, toughening of credit conditions, limited opportunities of replacement of external sources of financing internal, considering narrowness of the Russian financial market, and also the high prices of the imported goods of investment appointment. Weak domestic demand will have the constraining impact on import. Pure export will be the only component making a positive contribution to growth rates of release. Action of the specified factors will be resulted by reduction of release in 2015. Further in the conditions of development of import substitution, gradual diversification of sources of financing and mitigation of internal credit conditions, and also some increase in prices of oil restoration of quarter growth rates of GDP is expected.
Thus, the developing economic conditions will promote decrease of the inflation rate. The happened strengthening of ruble will continue to have the additional constraining impact on consumer prices. Decrease of the inflation rate both in monthly, and in annual expression is expected. Delay of growth of consumer prices will create prerequisites to decrease in inflationary expectations. According to the forecast of Bank of Russia, annual inflation will be slowed down to level less than 8% in a year and to the target level of 4% in 2017.
The main sources of inflationary risks are preservation of inflationary expectations at the increased level, deterioration of the external economic environment, revision of the planned rates of increase in regulated prices and tariffs, mitigation of the budgetary policy, and also acceleration of growth of a nominal salary, including in the budgetary sector. In process of further weakening of inflationary risks the Bank of Russia will be ready to continue decrease in key interest rate.
The following meeting of the Board of Directors of Bank of Russia at which the question of the level of key interest rate will be considered, is planned for June 15, 2015. Time of the publication of the press release about the decision of Board of directors of Bank of Russia — 13:30 Moscow time.