Russia has made substantial progress in fighting inflation, Alexei Zabotkin, deputy governor of the central bank, said on Tuesday, ahead of a rate-setting meeting scheduled for September 12.
Last year, the central bank hiked its key rate to 21%, the highest level since the early 2000s, in order to bring down inflation in an economy overheated by state spending related to the conflict in Ukraine.
As a result Russia's economic growth has slowed sharply, to an expected 1.2% for 2025 from 4.3% last year, while the rouble has strengthened by over 40% against the U.S. dollar, helping to bring inflation down by making imported goods cheaper.
The central bank, accused by some business leaders of stifling the economy by making credit too expensive, began cutting the key rate in June. It is now at 18%, a level still seen by critics as too high to revive growth.
Annual consumer price inflation was 8.79% in July, down from 9.40% in June. The central bank expects the inflation rate to fall to its target of 4% in 2026.
"Can we speak of a victory over inflation? We can probably speak of substantial progress in reducing inflation compared to the situation at the end of 2024," Zabotkin told a news conference.
"But it is still premature to assert that the sustainable pace of price growth and persistent inflationary pressure have already fallen to the target of 4% on a seasonally adjusted annualised basis," he added.
Zabotkin said that the central bank is exercising caution in its assessments of inflation reduction to ensure they are not overly premature or overly optimistic.
