Russia's annual inflation rose to 3.4 percent in September from 3.1 percent in August, which broadly corresponded to the base forecast of the Central Bank of Russia, the bank said Thursday.

"Food inflation, the increase in which was associated with the normalization of balance of supply and demand in individual markets, and the weakening of the ruble were the main contributors to the acceleration of the price rise," it said in a report.

The bank said it expected the annual inflation to rise up to 3.8-4.2 percent by the end of this year and to 5.0-5.5 percent in 2019, particularly due to the planned increase in Value Added Tax (VAT) to 20 percent from 18 percent early next year, the report said.

According to the bank, Russia's annual inflation will return to 4 percent in the first half of 2020, confirming its earlier forecast. 

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