Households’ and businesses’ inflation expectations declined in May, reports Inflation Expectations and Consumer Sentiment, an information and analytical commentary. Price growth slowed on the back of the ruble’s strengthening and weak demand, which emerged as key reasons behind the downward movement.

In May, the pollster inFOM continued Bank of Russia-commissioned telephone surveys of households, which were started in March. The survey results show a drop in inflation expectations for the month ahead. In the list of products whose prices went up, non-perishable items and fruit and vegetables were less frequently mentioned. Respondents cited the strongest growth of prices for these goods in April — which however slowed down in early May.

According to corporate surveys the Bank of Russia held this May, businesses’ price expectations for the next three months dropped on the back of a stronger ruble and lower costs. Expectations were up only in the mining and quarrying sector, driven by changes in global commodity prices.

The Bank of Russia predicts annual inflation at 3.8–4.8% in 2020; moving forward, it will remain close to 4%.