Year-on-year, cost of food and non-alcoholic beverages rose by 22.4 percent from 24.4 percent in the previous month. Increase in transport prices eased to 11.9 percent (12 percent in April), recreation and culture rose at a slower 17.3 percent (from 17.7 percent) and cost of housing and utilities increased 9.7 percent, less than 10.3 percent in the previous month.
Month-on-month, inflation slowed for the fourth consecutive period to 0.4 percent, the lowest level since August last year. Food inflation eased to 0.1 percent (0.3 percent in the previous month) and nonfood inflation slowed to 0.5 percent (0.9 percent in April). In contrast, cost of services increased 0.5 percent compared with no change in April.
The inflation rate has been on an upward trend since the beginning of 2014 and reached a 13-year high of 16.9 percent in March, fueled by the ruble depreciation and import restrictions that pushed import prices up. As a result, the Bank of Russia dramatically increased its key interest rate to 17 percent in December of 2014. Since then, the central bank has cut the rate three times to 12.5 percent as oil prices stabilized and the ruble gained more than 12 percent to the USD.