Kommersant.ru reports that the inflation in 2012 was one of the lowest in Russia’s history. According to the preliminary data published by the Russian Statistics Bureau, consumer prices increased by 6.6 percent in 2012. The Government planned to keep the inflation at the all-time low of 6 percent (already registered in 2011), but the plan was spoiled by increased food prices due to a bad harvest. Economic slowdown, loosened exchange rate policy and budgetary restrictions helped keep the inflation within reasonable limits and provided hopes for its further reduction in 2013.
Inflation picked up the pace at the end of the year as a result of increased demand for food products and increased energy consumption due to extremely cold weather, which translated into higher prices for services. On the other hand, prices for non-food items increased by only 0.3 percent in December, which is their lowest monthly increase in 2012. Deputy Minister of Economy Andrey Klepach noted that the citizens are increasingly turning towards savings, and the traditional interest rate increase on deposits at the end of the year only strengthened that tendency. The first quarter of 2013 will show whether this is a temporary occurrence or the beginning of a trend that could bring the inflation even lower. In addition, it seems that the Russian Central Bank prefers price stability to unconditional economic growth. Mr. Alexei Ulyukaev, Deputy President of the Russian Central Bank, stated in mid-December that he expects the inflation to return to the Central Bank’s target of between 5 and 6 percent in the second quarter of 2013.