Russian inflation rises to 6.0 percent on one-off factors

Russia's annual inflation rate increased to 6.0 percent in January 2026, up from 5.59 percent in December, the Central Bank of Russia reported. Monthly price growth accelerated to 1.62 percent, primarily due to one-off factors like VAT and excise rate hikes.

One-off factors fuel January price surge

In January 2026, Russia's monthly price growth, seasonally adjusted and annualised (SAAR), surged to 14.6 percent, a significant acceleration from 3.1 percent in December 2025.

This increase was primarily driven by several one-off factors, including rises in VAT, excise rates, the car recycling fee, and the indexation of regulated tariffs.

Volatile components, such as fruit, vegetables, and eggs, also made a notable positive contribution to the monthly price growth.

Annual inflation rose to 6.00 percent in January, up from 5.59 percent in the previous month, largely influenced by these volatile price movements and housing and utility services.

Despite the headline increase, underlying inflation measures showed mixed signals, with some annual growth rates decreasing or changing insignificantly, while the core CPI (SAAR) reached 9.2 percent in January.

Underlying trends and a strengthening ruble

Underlying inflation measures generally increased in January, as many are calculated without VAT adjustments.

The rise in VAT had a direct effect, with companies passing increased costs through to prices, particularly for non-food goods like cars, electronics, and construction materials, as well as personal services.

However, high-frequency indicators from the Bank of Russia's business monitoring suggest that retailers lowered their short-term expectations for output price growth in February, indicating no significant secondary inflationary pressures from tax measures.

The ruble exchange rate appreciated against major currencies in January, including the US dollar (1.5%), Chinese yuan (0.2%), and euro (1.1%), contributing to a notable 12-month appreciation against these currencies, largely due to a base effect from late 2024.

Temporary surge, long-term moderation

January's inflation surge appears largely transient, driven by specific administrative and seasonal factors rather than broad-based demand pressures.

While the immediate figures are high, the Bank of Russia's forecast for inflation to fall to 4.5–5.5% in 2026 suggests confidence in its monetary policy stance.

The mixed signals from underlying measures and business expectations indicate that the central bank will likely maintain its cautious approach, balancing short-term price shocks with its long-term target.