# Russia’s 2022 inflation seen at 13.4%, more rate cuts to come: Reuters poll Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-07-29 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Analysts Trim Russia Inflation Forecasts as Sanctions Bite Meta Description: Analysts revise their year-end inflation forecasts for Russia, foreseeing central bank rate cuts to soften impact of sanctions and economic decline. URL: https://financedigest.com/russias-2022-inflation-seen-at-13-4-more-rate-cuts-to-come-reuters-pollhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-07-29t130437z1lynxmpei6s0mrrtroptp4russia-inflation-1736815520386-compressed.jpg) MOSCOW (Reuters) – Analysts have trimmed their year-end inflation forecasts for Russia and see room for the central bank to continue cutting rates as it tries to blunt the impact of major sanctions, a Reuters poll suggested on Friday. Russia’s economic landscape changed drastically after Moscow sent tens of thousands of troops into Ukraine on Feb. 24, triggering sweeping Western restrictions on its energy and financial sectors, including a partial freeze of Russian reserves, and leading scores of companies to exit the market. The average forecast among 17 analysts [polled in late July suggested the Russian economy was on track to shrink by 5% this year](https://www.financedigest.com/germany-home-prices-to-sink-nearly-6-this-year-reuters-poll.html "Germany home prices to sink nearly 6% this year – Reuters Poll"). A similar poll in June had predicted a contraction of 7.1%. Analysts’ [forecasts are becoming less pessimistic as officials revise their outlooks](https://www.financedigest.com/elevator-maker-kone-hikes-outlook-as-q1-profit-orders-beat-forecasts-2.html "Elevator maker Kone hikes outlook as Q1 profit, orders beat forecasts") and fresh statistics arrive. Data published this week showed industrial output, real disposable incomes and retail sales all fell in year-on-year terms in June, although the [unemployment rate](https://www.financedigest.com/u-s-job-growth-powers-ahead-unemployment-rate-at-3-4.html "U.S. job growth powers ahead; unemployment rate at 3.4%") stayed at a record low. The [economy ministry in April said gross domestic product could fall by more than 12% this year](https://www.financedigest.com/global-economy-seen-facing-a-challenging-year-eurochambres.html "Global economy seen facing a challenging year -Eurochambres"), in what would have been the biggest contraction since the mid-1990s, but forecasts have softened since then as Russia pushes back against restrictions. The rouble soared to over seven-year highs in late June, supported by capital controls Moscow introduced to shield its financial system from sanctions, as well as Russia’s strong current account surplus due to high [prices for commodity exports and falling](https://www.financedigest.com/uk-house-prices-stabilise-after-four-month-fall-halifax-says.html "UK house prices stabilise after four-month fall, Halifax says") imports. But the currency is seen weakening in coming months as the government is expected to take steps to curb its strength. The rouble is expected to trade at 75.00 against the dollar in a year from now, [according to the poll](https://www.financedigest.com/investment-in-mental-health-amongst-cybersecurity-professionals-set-to-increase-according-to-infosecurity-europe-poll.html "Investment in mental health amongst cybersecurity professionals set to increase according to Infosecurity Europe poll"), compared with a rate of 75.73 predicted by analysts in late June. Friday’s official [rate was at 60.20 roubles per dollar](https://www.financedigest.com/yen-sinks-as-rates-outlook-diverges-nz-dollar-tumbles.html "Yen sinks as rates outlook diverges; NZ dollar tumbles"). Inflation, one of the key [concerns among Russian](https://www.financedigest.com/oil-gains-as-russian-supply-cuts-temper-concerns-over-rate-hikes-high-stocks.html "Oil gains as Russian supply cuts temper concerns over rate hikes, high stocks") households, is expected to accelerate to 13.4%, from 8.4% in 2021, according to the poll, but below last month’s expectations of a 14.5% annual consumer prices increase. The central bank said inflationary expectations among Russian households declined in July, which may give it room to [cut rates](https://www.financedigest.com/interest-rates-are-cut-to-an-all-time-low-what-will-this-mean-for-small-businesses.html "Interest rates are cut to an all-time low. What will this mean for small businesses?") further to provide the stranded economy with cheaper lending. A strong rouble and the [economic decline will contribute to a further slowdown of inflation,”](https://www.financedigest.com/hotel-investors-should-they-be-worried-about-a-potential-economic-pause-delving-into-inflation-interest-rates-recession-etc.html "‘Hotel Investors – should they be worried about a potential economic pause?’ delving into inflation, interest rates, recession etc") said Mikhail Vasilyev, chief analyst at Sovcombank, who forecast a 50-basis-point cut to 7.5% at the next rate-setting meeting on Sept. 16. The consensus forecast suggested the [central bank would cut the rate](https://www.financedigest.com/central-banks-hike-rates-again-but-a-pause-is-coming.html "Central banks hike rates again, but a pause is coming") to 7% by year-end from 8% at the moment. In January, before the conflict in Ukraine began, analysts had on average expected the economy to [grow by 2.5% with year-end inflation](https://www.financedigest.com/can-beijing-decouple-its-reopening-from-growing-inflation-in-2023.html "Can Beijing Decouple Its Reopening From Growing Inflation in 2023?") at 5.5%. Russia [targets inflation](https://www.financedigest.com/the-mouse-that-roared-new-zealand-and-the-worlds-2-inflation-target.html "The mouse that roared: New Zealand and the world’s 2% inflation target") at 4%. [(Reporting by Reuters)](https://www.financedigest.com/indonesia-to-tighten-used-shoe-import-controls-after-reuters-report.html "Indonesia to tighten used shoe import controls after Reuters report") --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---