The spatial asymmetry of inflation in Russia: On expanding the reference framework of monetary policy

Abstract

The article examines interregional heterogeneity of inflation in Russia under inflation targeting. It shows that a monetary policy framework focused exclusively on the aggregate consumer price index does not fully capture the quality of price stabilization in a geographically vast and structurally differentiated economy. A common macroeconomic inflationary impulse reaches regional economies with varying intensity because they differ in sectoral composition, competition, infrastructure, tariff environments, logistics costs, and institutional conditions. Using Bank of Russia and Rosstat data for 85 Russian regions, the study analyzes consumer price growth in late 2025 and early 2026. The results show that substantial spatial asymmetry in price dynamics persists even as nationwide inflation slows, with services remaining one of the most persistent sources of price pressure. The article therefore proposes supplementing the existing monetary policy framework with an indicator of interregional inflation heterogeneity that defines permissible limits for territorial differentiation in inflation. The indicator is not an independent monetary policy target but an auxiliary analytical and communication benchmark that distinguishes formal attainment of the inflation target from substantively balanced price stability. Finally, the article develops a monetary policy decision matrix based on nationwide inflation, the nature of the inflation shock, and the degree of interregional differentiation in price dynamics.