Inflation Finds Its Braking Distance: How Prices Rised in June

Inflation in the country has begun to slow down, as evidenced by the latest data from Rosstat. In June, consumer prices in the country on average increased by only 0.2% - this is the lowest monthly figure this year. And in annual terms, inflation slowed to 9.4% from 9.88% a month earlier. This is certainly good news for citizens exhausted over the past couple of years by the total increase in prices for literally all goods and services. But there is no reason for euphoria. Economists warn: already by the end of July, inflation may again begin to gallop - after all, from the first of the month, housing and communal services tariffs were sharply raised (by an average of 12%), which will inevitably affect the entire chain of consumer prices.

So, according to Rosstat calculations, inflation in the country last June was 0.2%. And this can be considered a very good result, since in each of the previous five months of the year the indicator was 2-6 times higher. In the first half of the year, consumer prices in the Russian Federation grew by 3.77%. This figure also looks good, since purely arithmetically it gives hope that by the end of the year inflation will be 7 - 7.5%. And this is clearly lower than last year's figure of 9.52%. For now, annual inflation is at 9.4%. And here, too, some slowdown is recorded after the May figure of 9.88%.

In general, inflation is slowing down, albeit not very noticeably yet. This is most clearly seen in food prices, which traditionally worry the population the most. They have remained virtually unchanged in June: more precisely, they have grown, but only by 0.11%. However, the long-awaited reduction in the price of fruit and vegetable products has been recorded: they have fallen in price by 1.88% in a month.

True, the picture does not look so optimistic if you look at the annual price dynamics. Food products in general have increased in price by 11.91% over the year, and fruit and vegetable products - by 15.25%. But optimists can consider June a turning point, from which the process of reducing food prices will begin.

Many products confirm this version. Prices for white cabbage fell by 17.2% in the first month of summer, for tomatoes – by 11.4%, for sweet peppers – by 9.5%, for onions – by 6.7%, for bananas – by 5.1%. Even the long-suffering potato, which, as it seemed, had basically forgotten how to get cheaper in Russia, finally dropped in price by 4%.

Although, of course, there were growth drivers on the grocery shelves in June. Carrots went up in price by 15.4%, beets by 7.9%, apples by 6.9%.

Non-food products last month quietly, but still became cheaper - by 0.03%. Although in annual comparison, prices for them grew by 4.47%. Many building materials demonstrated noticeable growth. Plus, gasoline prices grew by 0.7% in June. But electronics and household appliances are getting cheaper. Televisions, vacuum cleaners, smartphones, cameras, washing machines have become cheaper by 2-3% in a month.

In June, services became more expensive by an average of 0.59% (in annual terms - by 12.02%). Here, the tone is set by tourist services: holidays on the Black Sea coast of Russia in the first month of summer increased in price by 9.1%, trips to the countries of Southeast Asia - by 5.1%, to the countries of Transcaucasia - by 4.9%. Passenger transport services are not far behind: in June, prices for travel on the metro increased - by 5.5%, in seated cars of long-distance trains - by 2.6% and in suburban trains - by 2%.

In general, the June price dynamics turned out to be mixed and multidirectional. It is worth noting that it was in June that for the first time in a long time the Bank of Russia lowered the key rate from 21% to 20%, thereby sending a signal to the market that inflation had begun the long-awaited slowdown. And the head of the Central Bank Elvira Nabiullina made a cautious statement that "for now the inflation dynamics are closer to the lower limit of the Central Bank's forecast of 7-8% for 2025."

Economic Development Minister Maxim Reshetnikov said essentially the same thing, albeit in a more optimistic tone. According to him, “inflation is slowing faster than expected and is currently on a trajectory below the ministry’s forecast of 7.6%.”

But let's not forget that after a more or less favorable June in terms of price dynamics, July arrived. And from the first day of the second half of the year, housing and communal services tariffs were sharply raised in the country - on average by almost 12%. Thus, inflation in Russia received a new powerful impetus: after all, these same tariffs for electricity, gas, heat - are included in the cost of almost all products, goods and services. Already the first week of July, the data for which Rosstat managed to calculate, confirmed these fears: weekly inflation was recorded at 0.79% - 4 times higher than for the whole of June!

"By the end of the month, we should expect that the impact of tariff growth on inflation will gradually decrease, since the effect of the sharp adjustment of prices for services has already been mostly played out in the first week of July," says Freedom Finance Global analyst Vladimir Chernov. However, in his opinion, this factor will not be completely neutralized and the residual pressure of increased housing and utilities tariffs will remain, especially in terms of the impact on the cost of housing maintenance, logistics and utilities.

The analyst believes that inflation in July may exceed 1% per month, and annual rates will begin to moderately accelerate again. "By the end of the month, annual inflation may rise to 9.6-9.7%. Increased inflation expectations of the population have an additional impact on the growth rate," Chernov predicts.

"I am very concerned about this date - July 1," admitted Igor Nikolaev, chief research fellow at the Institute of Economics of the Russian Academy of Sciences, in a conversation with MK. "On this day, housing and utilities tariffs were indexed: on average, the growth across the country will be almost 12%, and in some regions - more than 20%. This is a very significant increase, especially when compared with recent years. We have not seen such growth in housing and utilities for a long time. And if we remember that in July of last year there was also a surge in inflation, it becomes alarming."

In this regard, the expert doubts that the peak of inflation has already passed and that it will only continue to fall. Moreover, there are other risks, such as a possible weakening of the ruble by the end of the year. And when the ruble falls, prices inevitably begin to rise. "That is why I am not so optimistic. If inflation remains within 10% by the end of the year, that will already be a good result," the economist believes.