Russian Inflation Slows to 5.6% in April
Bottom Line: Russia’s annual inflation continued its decreasing pattern moderately in April, and stood at 5.6% y/y owing to lagged impacts of previous aggressive monetary tightening, relative resilience of RUB and softening core inflation. Despite Central Bank of Russia (CBR) predicts annual inflation to decline to 4.5–5.5% in 2026, our 2026 average headline inflation projection stays at 5.9% due to inflationary risks.
Figure 1: CPI, Core Inflation (YoY, % Change) and Policy Rate (%), January 2015 – April 2026
Source: Continuum Economics
After annual inflation edged down to 5.9% y/y in March, the decreasing trend continued moderately in April and inflation hit 5.6% y/y thanks to lagged impacts of previous aggressive monetary tightening, relative resilience of RUB and decreasing core inflation. MoM inflation surged by 0.1% in April after a 0.6% rise the previous month.
According to Rosstat announcement on May 15, food inflation eased up a bit, dropping from 5% in March to 4% in April, thanks to a bigger dive in fruit and vegetable prices (-6.6% vs -2.3%). Meanwhile, non-food items got pricier (going from 3.5% in March to 3.9% in April), and services stayed expensive, barely budging at 9.9% compared to the previous 10%.
Speaking about the inflation trajectory, Central Bank of Russia (CBR) governor Nabiullina recently said that "Regarding achieving the 4% target, we have not abandoned our intention this year to draw a line after five years of high inflation. (…) It is precisely underlying inflation that matters to us, will be around 4% already in the second half of this year." The CBR projects annual inflation will decline to 4.5–5.5% in 2026, aiming for a return to its 4% target by 2027. However, we believe meeting this target range will be challenging in 2026. Persistent sanctions, the fallout from the conflict in Iran, sustained military spending and excise taxes are likely to prolong the disinflationary process beyond the CBR's expectations. We think pro-inflationary risks still prevail over disinflationary ones in the mid-term horizon.
Our average inflation forecasts stand at 5.9% and 5.2% in 2026 and 2027. We believe a peace deal in Ukraine remains the real key to ease pressure on inflation and alleviate demand-supply imbalances in Russia.