The Central Bank predicts in 2019, the excess of the annual inflation of 4% due to the growth of VAT

© RIA Novosti / Vladimir Traveloperator in fotoracconti Russia. Archival photoThe Central Bank predicts in 2019, the excess of the annual inflation of 4% due to the growth of VAT© RIA Novosti / Vladimir Traveloperator the image Bank

The Bank of Russia has kept the inflation forecast for the end of the current year at 3.5-4% in 2019, predicts a temporary excess of the annual inflation of 4% due to the increase of value added tax, press release of the regulator.

«The Bank of Russia forecasts annual inflation rate of 3.5–4% at the end of 2018 and the temporary excess inflation of 4% in 2019 in connection with the planned increase in value added tax. This increase will have a one-time effect on prices, so the annual rate of consumer price growth will return to 4% in the beginning of 2020», — stated in the message.

The state Duma in July passed a law increasing the rate of value added tax (VAT) from 1 January 2019 to 20% from the current 18%. Now the law must be approved by the Federation Council and signed by the resident of the Russian Federation.

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