Russia records weekly inflation for first time since May

Prices rose across the Russian economy in the week to July 1 for the first time since late May when a surging rouble and a drop in consumer demand led Russia to record weekly deflation, data published on Wednesday showed.

Russia's consumer price index rose 0.23% during the seven-day period, the Rosstat state statistics service said - an increase from its flat reading a week earlier and three consecutive weeks of falling prices in late May and early June.

So far this year, prices have jumped 11.77%, Rosstat said, far above the central bank's inflation target of 4%.

Russia saw weekly inflation hit a two-decade high of 2.22% in early March after it sent troops into Ukraine - a move which triggered unprecedented economic sanctions from the West, putting pressure on Russian households already struggling after almost a decade of stagnant or falling wages.

An emergency interest rate hike to 20% and strict capital controls helped pushed the Russian rouble to multi-year highs, ushering in a rare bout of deflation across the economy in June, but spooking policymakers who feared the strong currency was hurting Russia's export-reliant economy. 

The central bank has since cut interest rates to 9.5% - the same as before Moscow launched what it calls its "special military operation" in Ukraine - and relaxed some capital controls.

Poorer access to goods, severe disruption to supply chains, an exodus of Western firms and sanctions on the import of crucial equipment and technology could push the Russian economy into its worst economic downturn since the mid-1990s.