OREANDA-NEWS At the moment, inflation in Russia is temporarily at a reduced level due to the effect of a high comparison base in the spring of 2022. In the second quarter of this year, the indicator will drop to minimum values and will be below the target level of 4 percent, and then move to gradual growth, the Central Bank warned in a new report on monetary policy.

According to the results of the second quarter of 2023, inflation will decrease to 3.6 percent after 3.5 percent in the first quarter. In general, prices will increase by 4.5–6.5 percent in 2023.

The main driver of accelerating price growth will be a gradual increase in consumer demand. Inflation will also be affected by "increasing pressure from the labor market against the background of imbalances between labor demand and labor supply."

To achieve the inflation target in 2024, the Central Bank may raise the base interest rate. In the baseline scenario, the regulator predicts that the rate will be set at 7.3–8.2 percent for 2023 and 6.5–7.5 percent for 2024.

Following the meeting of the Board of Directors of the Bank of Russia on April 28, it was decided to keep the key rate at 7.5 percent per annum. The key parameter of monetary policy remains unchanged for the fifth time in a row.