“Core inflation (1.3% year-on-year) matched the January-July average of this year. According to our forecast, July’s -0.3% year-on-year was the lowest point of this year’s CPI path, to be followed by a modest rise in August and year-on-year rates close to 1% in the autumn months,” the CIB analysis says. “The rise is set to be supported by the base effect, especially from September.”
Despite being negative except one month this year, CIB expects that “annual average CPI may come close to 0.5%, showing that the July figure should not reshuffle inflation expectations,” while it sees no change in the monetary policy outlook either.
CIB noted that fuel prices contributed to the drop through a 2.2% month-on-month decrease this time, versus some rise in the preceding month, while in annual comparison they stood 13% lower.
CIB believes that, considering month-on-month changes, food and clothes prices also contributed to lower CPI, in tandem with seasonal price swings. Service prices accelerated to the highest month-on-month of this year (+0.6%), reflecting stronger domestic demand. This impact, however, failed to boost the price level of durable goods, CIB noted.
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