Inflation rate has fluctuated between 3% and 4% in recent months. Annual change in consumer prices amounted to 3.7% in September. Among different product groups, the prices of everyday essentials, i.e., housing, food, transport, have been contributing to inflation the most.
For the year as a whole, inflation should stay around the same level as last year at 3.4%. Next year, inflation is expected to slow gradually as energy prices should stabilise and the planned excise tax hikes are cancelled.
Despite surging labour costs, inflation is mainly boosted by tax hikes and external price pressures (higher energy prices and a draught lifting the prices of vegetables). The price of oil reached four-year high globally because of the US sanctions on Iran. Higher energy prices have lifted the prices of electricity, heating, and motor fuels. In addition, substantial increases in excise taxes pushes up the prices of alcoholic beverages, tobacco, and motor fuels.
Despite rapid inflation, employees’ net average real wage is expected to jump by almost a tenth this year as the average gross wage grows twice as fast as the average cost of living, and the non-taxable income will increase substantially for the majority of workers.