According to the Russian Federal State Statistics Service (Rosstat), inflation fell to a record low of 6.1 per cent in 2011, with prices rising only 0.4 per cent in December. This was even lower than official forecasts (Ministry for Economic Development – 6.2 per cent). The low rate has been attributed to a large harvest in 2011, and a resultant small increase in food prices, and also the role of the Central Bank in curbing growth in the money supply.
It is anticipated that inflation will remain low, at least in the first half of 2012 (until after the presidential elections), owing to the decision to delay any indexation in the tariffs of natural monopolies until July). However, once these tariffs have been indexed, inflation is likely to rise abruptly and exceed 7 per cent for the year as a whole.