Moreover, deflation in Russia will last until the end of September
Deflation in Russia will last for several more weeks — the trend will change only by the end of September, follows from the consensus forecast of Izvestia. Goods in the country have been getting cheaper for the fifth week in a row, this is due to the seasonal factor. At the same time, it is too early to talk about the victory of the Central Bank: the annual growth rates of prices for food products and services are still high. They are slowed down by the harsh policy of the Bank of Russia and the strong ruble, as well as negotiations between Russia and the United States. When we reach the 4% target, see the Izvestia article.
Deflation in summer-autumn 2025
Deflation in Russia has been recorded for the fifth week in a row. For example, from August 12 to August 18, it was 0.04% after 0.08% a week earlier. In addition, the annual price growth slowed to 8.49%.
Products in the country will continue to fall in price on average until the middle to the end of September, analysts from universities, banks and brokerage companies surveyed by Izvestia believe. The most positive assessment was given by Absolut Bank and the Financial University under the Government of the Russian Federation, which believe that the trend will continue until the end of autumn. On the contrary, Zenit and Sovcombank expressed the most negative expectations in late August and early September.
Deflation in 2025 appeared a little earlier than last year and turned out to be deeper, in particular due to the effect of a high base, says Ilya Fedorov, chief economist at BCS World of Investments.
— The observed decrease in consumer prices is a short—term situation that occurred after increased inflationary activity. If we consider the deflation of food products, it is worth noting that the seasonality factor plays an important role here. Fruit and vegetable products always become cheaper in the summer during harvest. Deflationary processes in the food category can last until winter at the most," said Nadezhda Kapustina, Professor at the Department of Economic Security and Risk Management at the Financial University under the Government of the Russian Federation.
At the same time, according to the expert, there is a decrease in prices for non—food products - building materials, household appliances, chemicals and medicines. For these categories, deflationary processes may last until the middle of spring next year, but then seasonal factors and accumulated inflation expectations will reappear, Nadezhda Kapustina added.
From October to June, the key rate remained at a record high of 21% per annum. This overcooled the economy, slowed down the growth of the consumer sector and, as a result, created conditions for deflation, independent expert Andrei Barkhota drew attention.
Why price growth in Russia remains high
Annual inflation in Russia is still high due to external and internal factors. Among the first are the sanctions pressure and the associated reduction in oil and gas budget revenues, said Mikhail Khachaturian, Associate Professor at the Department of Strategic and Innovative Development at the Financial University. In addition, the next round of trade wars remains a trigger.
Fiscal policy is one of the internal pro-inflationary risks, Olga Belenkaya, Head of the Macroeconomic Analysis Department at Finam Federal State Institution, drew attention. For seven months of 2025, the treasury deficit amounted to 4.9 trillion rubles — for comparison, the updated financial plan for the year includes about 3.8 trillion. The expert explained: it is likely that the shortage by the end of the year will be higher than planned, and this may lead to an acceleration in the growth of the money supply, which will boost inflation.
However, high inflation expectations on the part of both the population and businesses also contribute to the price increase, Anton Pavlov, Deputy Chairman of the Board of Absolut Bank, is convinced. So, according to a survey commissioned by the Central Bank, expectations about the price increase of the Russian population in August 2025 even increased to 13.5%. For comparison, in June and July 2025 they were at the level of 13%.
In addition, the extremely scarce labor market does not dramatically slow down annual inflation, says Artem Lyukshin, associate professor of the Department of State and Municipal Finance at Plekhanov Russian University of Economics. According to the latest data, unemployment is at a record low of 2.2%, and the shortage of workers is unlikely to improve by the end of 2025.
Deflation will not be a long-term trend, as the risk of accelerating inflation remains high. This is due, among other things, to the rise in the price of gasoline. During the last reporting week, fuel prices, albeit slightly, changed in 77 regions. The most significant were in the Kaluga Region (2.3%) and Dagestan (2%). Since the beginning of the year, its value in the whole country has increased by almost 6%.
— That is, wholesale gasoline prices are already breaking records due to increased demand during the harvest and holidays, and they may soon affect retail prices if the Federal Antimonopoly Service does not limit them. The increase in retail fuel prices is immediately noticeable in the cost of almost all goods against the background of an increase in the price of their supplies," said Vladimir Chernov, analyst at Freedom Finance Global.
What can slow down inflation
There are also factors slowing down price growth. The tight monetary policy of the Bank of Russia has led to a decrease in inflation. In early June, for the first time in three years, the regulator lowered the key rate from a record 21% to 18% now. According to experts interviewed by Izvestia, at the next meeting on September 12, the Central Bank will soften its policy again, and by the end of the year the key will be at the level of 14-15%.
Due to high rates on deposits and loans, the population has switched to a savings model of behavior. Thanks to cost reductions, supply and demand have become more balanced, said Anton Pavlov from Absolut Bank.
The ruble has also had a positive effect on price growth. According to the Central Bank on August 22, the exchange rate of the Russian currency was 80.25 per dollar, which has strengthened by 21% since the beginning of the year. This happened against the background of positive news about negotiations on the settlement of the Ukrainian conflict and the establishment of a dialogue between the Russian authorities and the American ones.
However, there is still a risk that the ruble will weaken. Even despite successful negotiations, the exchange rate may rise by the end of the year — it is possible that it will reach about 92-95 rubles/$, Izvestia wrote earlier. Nevertheless, a weaker ruble will have a positive impact on the budget, but it may lead to higher prices for imported goods, said Vladimir Lyubetsky, associate professor of the Department of National Economics at the Presidential Academy.
At the same time, the adaptation of the financial system to work under secondary sanctions has significantly affected the spread of cross—border payments in rubles, in the currency of friendly countries, and in cryptocurrency, says Denis Popov, managing expert at the PSB Center for Analytics and Expertise.
However, experts interviewed by Izvestia believe that by the end of the year, inflation will be around 6.5–7%. At the same time, achieving the target level of 4% will require not only maintaining a strict labor market, but also increasing competition, achieving technological sovereignty and increasing labor productivity, Nadezhda Kapustina from the Financial University under the Government of the Russian Federation is convinced. Reducing geopolitical risks and stabilizing the external economic situation will also be mandatory conditions.
In this case, the target can be reached no earlier than the first half of 2026.
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