Inflation speeds up in most Russian regions in June

Source: Central Bank of the Russian Federation in English

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Annual inflation accelerated in June, driven by an active recovery of demand surpassing the potential to expand supply, higher global prices, the effect of last year’s low base, as well as one-off factors in the food and service markets.
The annual growth of food prices sped up mostly due to higher prices for such vegetables as cabbage, potato, carrot, beetroot and onion. These prices increased because of one-off factors as domestic product stocks were sold earlier than usual and, consequently, the portion of more expensive imports expanded.
The annual growth of non-food prices continued to accelerate in June, driven by rising demand which exceeded the potential to build up supply. Moreover, producers passed through higher costs to prices. The rise in costs was caused by a faster increase in global prices for timber and metallurgical products and polymers, as well as disruptions in global production and logistics chains associated with the pandemic and remaining restrictions.
The annual growth of service prices sped up due to higher prices for air transport, tourism, and health resort services. Prices for tourism services rose predominantly due to higher demand for travel both in Russia and to reopened destinations abroad.
Annual inflation in June ranged from 3.6% in the Nenets Autonomous Area to 9.9% in the Republic of Dagestan. Countrywide factors associated with higher food prices had the strongest impact on inflation in the North Caucasus as food products in this region account for a larger portion in the consumer basket.
Inflation accelerated the least in the Far East where food price growth slowed down. This effect was associated with movements of potato and cucumber prices which had surged the year before when vegetable imports contracted amid tightened anti-pandemic restrictions in China.
For details on inflation in Russian regions, please refer to the information and analytical materials published on the Bank of Russia website.