Inflationary expectations of the population fell to new low in July

In July, inflationary expectations of the population once again dropped to a new minimum, the Central Bank reports.

The average inflation forecast fell to 13%, down by 0.3 percentage points compared to June.

Even at the beginning of the year, the average level of inflation expectations was 18.9%, while the median level exceeded 15%. However, since February, forecasts have become much more optimistic.

About 25% of survey participants expect inflation to remain in the 9-12% range. Every fifth predicts its reduction to 6-8%, and 15% - to 5% or lower. 11% suggest a slight acceleration (13-16%).

Among the factors influencing the forecast, the share of exchange rate fluctuations continues to grow. Over the past month, 59% of respondents singled them out as a reason - almost a third more than three months ago.

In second place with 36% came the rise in fuel prices, also 32% named speculative price increases, rising costs of housing and communal services and salaries with benefits. Monopolies were mentioned a little less frequently - 31%.

Meanwhile, among entrepreneurs, the projected rate of inflation has begun to rise again. However, it is still significantly lower than in previous years.

The average level of inflation expectations among businesses in July rose to 13.5% (+0.3 percentage points). The median level was noticeably lower – 13.2%.

As for the population, the most important role in predicting price growth is played by the dynamics of the exchange rate – it was mentioned by 60% of respondents. The dynamics of fuel prices (37%), increase in salaries and benefits (33%) and the growth of utility costs (29%) followed next.

Less frequently highlighted were transport costs (25%) and reduced yields due to climate change (22%). About 20% of entrepreneurs noted the growth of the tax burden as a factor.