The decision was supported by the assessment of inflation risks and economic growth prospects. In December 2012 and at the beginning of January 2013 the pace of inflation increased to some extent and as of 9 of January was estimated at 6.8% over a year ago, which exceeded the target range. Core inflation declined to 5.7% in December 2012. The acceleration of consumer price inflation was mainly driven by higher growth rates of food and passenger transport services prices, while the nonfood goods inflation remained moderate in December. The inflation rate staying above the target range for a prolonged period of time may affect economic agents' expectations and thus poses inflation risks, despite the absence of any significant demand-pull price pressures, according to the Bank of Russia estimates.
The dynamics of the key macroeconomic indicators in November 2012 was in line with the previous trend towards gradual cooling of economic activity. The growth rates of industrial production and retail sales stabilized but remained subdued. The growth of investment in production capacity decelerated. At the same time, economic confidence indicators remain overall positive and labour market conditions together with credit expansion provide support to the domestic demand. According to the Bank of Russia estimates, the gross output remains close to its potential level. Taking into account still relatively high bank lending growth rates, the risks of a significant economic slowdown stemming from the tighter monetary conditions are considered minor.