The CBR are widely expected to keep its key rate unchanged at 16%.
In February, headline inflation rose +7.69% Y/Y compared to +7.44% the month prior. Nevertheless, the Bank stated last month that the balance of inflationary risks are still skewed to the upside given persistently high inflation expectations, a higher upward deviation of the Russian economy from a balanced growth path, as well as a fiscal policy normalisation path. Nevertheless, the CBR expect annual inflation to decline to 4.0–4.5% in 2024 and to stabilise close to 4% further on, assuming tight monetary conditions are maintained for a prolonged period.
Additionally, economic activity data continues to surprise to the upside – real wage (+8.5% Y/Y) and industrial production (+4.6% Y/Y) data for February both display the robustness of domestic demand, while the unemployment rate (2.9%) sits at record lows, highlighting the tightness of the labour market.
