Russian Inflation Hits Lowest Level Since Late 2022 Amid Food Prices and Tourism Costs Dynamics

22:24; 20 May 2026 year

### Consumer Prices Slow Down in April 2026: Russia Sees Lowest Inflation Rate in 3.5 Years Consumer prices in Russia in April 2026 showed the most significant deceleration in over three and a half years, according to the latest report from the Central Bank of Russia. The monthly increase (excluding seasonality) plummeted to 2.4% year-on-year, down from 5.9% in March. This is the lowest level since November 2022. However, it is too early to relax: the main driver of the slowdown was one-off and volatile factors. The underlying, structural component of inflation (excluding seasonal and temporary spikes) has decreased but continues to raise concerns among analysts. ### Visual Gap: Services Rising, Food Falling The most striking feature of April was the divergent dynamics of key segments. Although prices rose by only 0.14% on average (after 0.60% in March), this figure conceals a significant disparity: - **Food Prices Drop.** For the first time in a long while, food prices fell on average (-0.20% month-on-month, or -2.5% seasonally adjusted annualized rate). This was largely due to a sharp decline in fruit and vegetable prices. - **Non-Food Items Slow Down.** Non-food items saw moderate price increases (4.2% seasonally adjusted annualized rate). - **Services Soar.** The services sector continued to drive inflation, with a growth rate of 7.2% seasonally adjusted annualized rate. The cost of travel, medical, and household services remains elevated, and demand for them, according to the Central Bank, is poorly responsive to tight monetary policy. ### Stability Returns to Normal The key positive from the report is that core inflation indicators (base inflation, median values) are now close to the target of 4% annualized. Specifically, the weighted median stood at 3.4% (seasonally adjusted annualized rate), and a special index excluding the most volatile goods (vegetables, petroleum products, utilities, tourism, and transportation) was 3.8%. However, the dispersion of prices across individual goods remains higher than in the pre-crisis 2021. The center of gravity for price shocks has shifted: while earlier there were swings in both directions, now the number of components with abnormally fast growth is decreasing. ### One-Off Factors and Tourism Rebound Significant negative contributions to overall inflation came from: - **Fruits and Vegetables.** The traditional April decline was particularly pronounced this year. - **International Travel.** After several months of frenzied growth, prices for overseas trips finally started to fall. - **Eggs.** Returned to seasonal norms after spikes in February-March. Meanwhile, prices remain elevated for excise-taxed goods (gasoline, tobacco, alcohol) and hotel and resort services. ### Exchange Rates and External Context The ruble performed well in April: it strengthened by 4.3% against the dollar, 3.4% against the euro, and 3.7% against the yuan. However, goods with low sensitivity to exchange rates (e.g., domestic services) are rising in price twice as fast (5.5% seasonally adjusted annualized rate) as those with high sensitivity (2.8%). This indicates that internal demand and cost factors are exerting more pressure than currency fluctuations. Global markets are also a cause for concern: inflationary pressures are rising worldwide due to shipping issues in the Strait of Hormuz, pushing up oil and food prices. ### Regional Overview: Calm in Most Areas Out of 85 regions, 68 saw a slowdown in monthly price growth (representing 85% of the consumer basket weight). Annual inflation fell in 72 regions. The fastest declines were seen in southern Russia (-0.37 percentage points), while Siberia saw a slight increase (+0.04 percentage points). The regulator confirms that, under the current monetary policy, annual inflation will drop to 4.5-5.5% by the end of 2026. The current steady growth in prices should stabilize around 4% in the second half of the year. From 2027 onwards, inflation is expected to return to the target of 4%.

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