The Bank of Russia expects further changes in the consumer behavior of households in the coming months, according to the Central Bank’s commentary on inflation. “The price increase that has already taken place, economic uncertainty, an increase in the propensity to save due to the strengthening of the precautionary motive with the growth of the attractiveness of deposits, the tightening of consumer lending conditions – all this will generally restrain demand and affect its structure,” the Central Bank believes. Consumer behavior will also be affected by changes in inflation expectations, which are sensitive to observed price movements. “In general, in the short term, we can expect increased price volatility to persist in various segments of the consumer market: price dynamics will be formed in the context of shifts in consumer preferences, on the one hand, and manufacturers’ adaptation to new conditions, on the other,” the Bank of Russia emphasizes. Changes in consumer behavior and demand, on the one hand, and supply dynamics, which depend, among other things, on the scale and speed of import normalization and the effectiveness of import substitution processes, on the other, will become important factors in inflation in the coming months, the Central Bank notes. The monetary policy pursued by the Bank of Russia will take into account the need for structural adjustment of the economy and will ensure that inflation falls to 5-7% in 2023 and returns to the target in 2024, the commentary says. Source: FINMARKET.RU

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