Russian consumer prices dip for 8th straight week, GDP decline slows

MOSCOW (Reuters) -Russian consumer prices extended their decline for the eighth week running, data showed on Wednesday, thanks to a seasonal drop in fruit and vegetable prices, sluggish consumer demand and the rouble's strengthening over the past few months.

Separately, the ministry of economic development said Russia's economy shrank by 4.3% in July from a year earlier after falling 4.9% in June. In January through July, the economy declined by 1.1% from the same period a year ago.

The consumer prices index dipped 0.16% in the week to Aug. 29 after easing 0.15% a week earlier, the federal statistics service Rosstat said.

Annual inflation slowed to 14.31% as of Aug. 29 from 14.60% a week earlier, the economy ministry said.

The inflation pattern may open the door for more rate cuts by the central bank, which last month slashed its key rate by 150 basis points to 8% and indicated it was ready to consider further monetary easing. The next board meeting is scheduled for Sept. 16.

Despite the recent incremental declines in the CPI, prices for nearly everything, from milk and sugar to clothes and smartphones, have soared since Feb. 24 when Russia sent tens of thousands of troops into Ukraine.

Year-to-date, prices for foreign-made cars, sanitary pads and soap rose by around 40%, while the headline consumer price index rose 10.38% compared with a 4.69% increase in the same period of 2021, Rosstat data showed.

High inflation has been one of the key concerns among households for years as it dents their spending power and living standards, something that this year will be aggravated by recession in the economy.

Russia's economy will shrink by less than 3% in 2022, a top government official said this week, far less than initially expected, suggesting the economy is dealing with sweeping Western sanctions better than feared.

(Reporting by Andrey OstroukhEditing by Tomasz Janowski and David Gregorio)