Russia\u2019s slowing inflation is doing little to reassure households, with a new survey showing a sharp rise in perceived price growth and inflation expectations despite official data pointing to a slowdown.<\/p>\n
State statistics service Rosstat reported<\/a> that consumer prices rose 0.5% in October, bringing annual inflation to 7.7%. But a nationwide poll<\/a> conducted by the Public Opinion Foundation (FOM) for the Central Bank in early November showed that households believe prices are rising far faster than the official figures suggest.<\/p>\n The median estimate of inflation over the past 12 months rose to 14.5% from 14.1% in October, while expectations for the year ahead increased to 13.3% from 12.6% \u2014 marking the biggest jump since October 2024.<\/p>\n Economist Yegor Susin said<\/a> the rise in inflation expectations largely reflected concerns over higher taxes, fuel prices and the planned increase in the vehicle recycling levy.<\/p>\n \u201cPeople see what\u2019s going on,\u201d said<\/a> economist Dmitry Polevoy.<\/p>\n The increase was driven mainly by respondents with savings, whose inflation expectations climbed to 12.3% from 11.1%.<\/p>\n Expectations among those without savings were broadly stable at 13.7% versus 13.8% a month earlier.<\/p>\n Analysts said the headline figure would have risen further if the share of respondents reporting savings had not dropped to 31% from 39%.<\/p>\n Perceptions of current inflation told a different story.<\/p>\n Among households without savings, the median estimate rose to 15.4% from 15.1%, while it held at 12.9% among those with savings.<\/p>\n The Economic Development Ministry estimates<\/a> inflation rose by 0.1% in each of the first two weeks of November, bringing the annual rate down to 7.12%.<\/p>\n But impending hikes in VAT and the recycling fee, as well as public debate around their impact, have pushed expectations higher.<\/p>\n Gazprombank analysts said<\/a> households appear to have entered a \u201crace\u201d driven by fears of future price shocks.<\/p>\n Polevoy said<\/a> the strength of the reaction to the upcoming VAT rise, higher fuel prices and costlier recycling fees exceeded his expectations.<\/p>\n He noted that lower-income households \u2014 who spend more on essential items set to retain a reduced VAT rate \u2014 may face smaller price increases than wealthier households with broader consumption patterns.<\/p>\n Gazprombank analysts said<\/a> expectations could have risen more sharply, noting that a similar VAT increase in 2019 triggered a stronger response. Polevoy said he expects the spike to fade as fuel prices ease and the tax changes are absorbed.<\/p>\n Inflation expectations have hovered between 12.6% and 14% for more than a year and now sit in the middle of that range, analysts at MMI said<\/a>.<\/p>\n They warned that expectations have become \u201cstuck at an unacceptably high level.\u201d<\/p>\n