UrBC, Moscow, January 23, 2019. Russia’s inflation rate rose from 4.3% in 2018 to 4.7% a year on January 14, 2019, the Economic Development Ministry’s report on inflation in January 2019 indicates.

‘Two inflation-boosting factors came into effect in January 2019, namely, the VAT increase from 18% to 20% and an increase in the cost of utilities by 1.7% starting January 1. As a result, the inflation figures stood at 0.65% on January 1-14, 2019 compared with 0.21% a year earlier. As of January 14, the inflation rate was estimated to speed up to 4.7%,’ the report states.

The ministry’s analysts believe a partial increase in the cost of utilities at the start of the year, provided the increase percentage does not exceed that for last year, will actually prove an inflation-buffering factor in the second half of 2019.

Now the Russian Government expected the inflation rate to stay within 4.3% a year, whereas the Bank of Russia expects the figures to reach 5% to 5.5% by the end of the year. Head of the Bank of Russia Elvira Nabiullina said at the Board of Directors meeting on December 14, 2018 that the actual percentage might reach as much as 6%.