elvira nabiullina : review of recent inflation developments in russia and economic outlook statement by ms elvira nabiullina, governor of the bank of russia, in the follow - up to the board of directors meeting, moscow, 13 december 2019. * * * today, the board of directors has decided to cut the key rate by 25 bp down to 6. 25 % per annum. we will consider the necessity of further key rate reduction in the first half of 2020. let me dwell on the main factors behind the decision. first. annual inflation continues to decline faster than we expected. our revised inflation forecast for the end of this year is 2. 9 – 3. 2 %. meanwhile, average 2019 inflation will stand at 4. 5 %, which reflects the high price growth rate in late 2018 and the first months of 2019. this significant slowdown in inflation in the second half of the year was caused by a joint action of a number of disinflationary factors, both temporary and more persistent. these factors include an increased supply of individual food products due to a bumper harvest. also, price growth of imported goods is still limited due to the ruble appreciation and inflation deceleration amongst russia ’ s trading partners. at the same time, moderate demand, both external and internal, is a more persistent factor. the proportion of temporary and persistent factors has yet to be estimated. most indicators that we analyse reflect low inflationary pressure. annual core inflation is declining at the same rate as the headline consumer price index. both indicators were registered at 3. 5 % in november. seasonally adjusted monthly price growth has been around 0. 2 % since june. for food products, this indicator came in even lower in october and november. if we transform these monthly indicators into annualised form, the result will be lower than 4 %. however, looking at the key product groups, while annual food and non - food price growth keeps falling, services prices increased slightly faster in november with their growth rate reaching 3. 9 %. this was mainly owing to the market services segment, which could be an early sign of a potential revival of demand. survey results also indicate an improvement in consumer sentiment. as to the next year, our inflation forecast for the first quarter is below 3 %. this decrease will be temporary. it is in line with our expectations and is explained by the fact that the effect of the vat rate increase will be factored out from the calculation of annual

and secondary school levels by 2021. similarly, greater attention should also be accorded to long - term financial and retirement planning from young, or when entering the workforce. there should be greater awareness on the importance of saving for the future. as most of us here represent employers throughout malaysia, i would urge that financial education and planning aspects should be embedded in our training modules, including the retirement module developed by akpk and kwsp. moving on the second focus area on – individual responsibility to take charge of its own financial decisions and well - being. the financial capability and inclusion demand side survey 2015 – also suggests that malaysians are not adequately taking charge of their own financial decisions and well - being. for example, with regard to retirement – one - in - three malaysians are very worried about their retirement. despite the worries, malaysians adopt a passive strategy for their retirement planning – such as relying mainly on the government or statutory bodies such as kwsp to fund their retirement needs. as mentioned earlier, many of kwsp ’ s contributors have insufficient funds for their retirement. this brings us to another question – what are their fall back plans? apparently, nothing concrete. the top three plans indicated in the survey are : a. first – to rely on passive savings, which may not be sustainable ; b. second – to rely on children or family members ; and 2 / 3 bis central bankers'speeches c. third – to always continue working. most financial decisions are influenced greatly by a person ’ s behaviour and attitude. notably, this will require behavioural change from within, which can be harder to initiate but not impossible to achieve. when equipped with the relevant knowledge and skills – an individual would acquire a positive attitude and be able to make financial decisions – rationally and responsibly, for his wellbeing in the short and long - term. the positive behavioural change includes prudent use of money and credit ; not easily influenced by emotions ; actively seeking of information for financial product comparison ; as well as making adequate provisions for old age. the third and final focus area – building financial capability and elevating financial literacy is a shared responsibility government agencies, schools, families, workplaces and the financial service industry – all play an important role in building financial capability and elevating financial literacy of our population. this is a long - haul journey and requires significant resources and perseverance by various parties. hence, inter - agency collaboration - providing various touch points at different platforms