After higher than expected inflation in May, which reached 2.9% year over year, price growth slowed to 2.7% in June due to slightly weaker growth in prices of alcoholic beverages, fuel and electricity for households. We expect average inflation to reach 2.6% this year.
The month-on-month rise in prices was negligible in June, with May’s 2% rise in food prices not repeated. In June, food grew by only 0.4% on average, usual during the summer as the new harvest gets to market.
Also fuel prices are not pushing inflation up as they did in previous months. Despite June fuel prices stagnating MoM, YoY dynamics slowed from 3.1% to -0.3 due to a base effect from last year. As such, the contribution of fuel prices to YoY inflation decreased by 0.1 percentage points in June vs May’s level.