CBA: Forecast of annual inflation around 8% remains unchanged

According to the assumptions of the base scenario, the forecast of annual inflation in 2023 will be around 8%, Report informs, referring to CBA.

“High uncertainties over inflationary factors in the global and national economy remain. Although the actual inflation level tends to decrease, in March it exceeded the upper limit of the inflation target by more than twofold. Food inflation, which is the main structural component of inflation, remains high at 16.8%. The price rise for non-food goods and services is 11.6% and 10.8%, respectively, on an annual basis. The growth rates of the producer price and import price indices remain at the double-digit level. Thus, in March, the annual increase in the agricultural producer price index was 12.7%. In February of 2023, the annual increase in import prices was 20.4%. Aggregate demand is expanding under the conditions of rising incomes of the population and continued stimulating fiscal policy. In the 3 months of 2023, the nominal income of the population increased by 15.2%. The external environment for inflation remains highly volatile. According to the International Monetary Fund's April forecast, global inflation increased by 0.4% to 7%. According to the opinion of influential experts, in the conditions where the current risks remain, the base inflation can return to the target only in 2025. The increase in risks related to the stability of the global financial system can also affect inflationary processes through various channels. The mentioned factors make it possible for the projected inflation to still exceed the accepted target,” CBA said.