The analyst assessed the consequences of the slowdown in inflation in Russia

The slowdown in inflation in Russia to 5.5% should not yet be perceived as a stable long-term trend. The current dynamics are largely related to the tight monetary policy of the Bank of Russia and lower producer prices, but inflationary pressures may increase as early as the second half of 2026. Igor Rastorguev, a leading analyst at AMarkets, told Izvestia on May 18.

The expert noted that the main factors of the slowdown were a decrease in the producer price index by 4%, as well as a sharp cooling in credit activity from both businesses and the public.

"Rather than a healthy cooling of the economy, this is a signal of stagnant demand. We see an actual halt in lending, which temporarily restrains price growth, but at the same time creates risks for economic activity," explained Rastorguev.

According to him, monetary policy easing has already begun: the key interest rate has been reduced to 14.5%. However, one should not expect a rapid further decline. The regulator explicitly points to the possibility of re-tightening the policy in the event of an acceleration of budget expenditures. Against this background, the forecast of the Ministry of Economic Development for inflation at 5.2% by the end of the year looks achievable, but remains quite ambitious.

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Will the Central Bank take this into account at the April 24 meeting and are there any risks of high price growth further?

At the same time, even the current level of the key interest rate does not yet create conditions for the restoration of investment activity.

"At a rate of 14.5%, the launch of most new projects remains economically impractical. A significant recovery in investments is possible only if the rate is reduced below 10%," the expert noted.

According to him, for now companies prefer to postpone large-scale business expansion and take a wait-and-see attitude.

On the same day, Maxim Reshetnikov, the head of the Ministry of Economic Development, said that inflation in Russia continues to slow down. According to him, this creates conditions for easing monetary policy. As of May 12, annual inflation dropped to 5.5%, which is lower than at the end of last year. Additional pressure on prices eased due to a decrease in the producer price index: in the first quarter, it fell by 4% in industry and by 0.6% in the manufacturing sector. The Ministry of Economic Development predicts that by the end of the year, inflation will slow down to 5.2%.