Russia defeated inflation and now risks facing deflation

9 2022 June 5

In May of this year, inflation in Russia fell to a record high of 0,12% and became the lowest for this month since 1991. In May 2021, it was higher and amounted to 0,74%. Rosstat informed the public about this.

It should be noted that in annual terms, inflation slowed down to 17,10% from 17,83% in the previous April, which was the highest since January 2002. In the past months of 2022, inflation looked as follows: in January - 0,99%, in February - 1,17%, in March - 7,61%, in April - 1,56%. At the same time, in January-May, prices in Russia increased by 11,80%.

The data for May open up a good opportunity for the Central Bank of the Russian Federation to reduce the key rate by at least 3 percentage points at the next meeting on June 10, from 11% to 8%. Whether the cautious Russian regulator will go for it is unknown, but on May 26 it lowered the key rate from 14% to 11%, which means that there is a possibility of such a decision.

Many experts believe that the Central Bank of the Russian Federation could now set the key rate at the level of 2-3%. This would help restart market lending in both the consumer and corporate sectors, which would be the impetus for the very “structural transformation” economicsabout which it is now fashionable to talk.

The results for May indicate that Russia has beaten inflation. However, now it risks facing monthly deflation in August-September, after the harvest, which is predicted to be good. Prior to this, only weekly deflation was recorded in the current year, and this was of an episodic nature.

In this regard, it can be predicted that, based on the results of 2022, inflation in Russia will be at a level not exceeding 13-14%. This will be an excellent bottom line, taking into account the sanctions war declared by the West against Moscow.

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Monster_Fat

-2

9 June 2022 10: 41

Rely on the data of the Russian so-called "statistics" - well, that's ... It's like they measured import substitution in Lada cars - by weight, and not by the importance of components. But the reality is that when the ruble collapsed to 120 rubles per dollar, then prices were raised everywhere up to 80-100%, and for some things even by 200%. Yes, they are frozen. Some, faced with a catastrophic drop in purchasing power for their type of product, lowered their prices slightly - by about 15-25%. But they still remain raised by at least 50-80% of the February level. In addition, the Central Bank, artificially keeping the dollar exchange rate at a low level, creates a situation where those citizens who kept their savings in foreign currency do not want to convert them into rubles and spend them, as they will have big losses, which naturally reduces demand in the domestic market . If we talk about prices, then they do not even think to decrease, on the contrary, they only grow. This is clearly seen in the mini Lenta store at my side. Only yesterday I bought yeast-free bread there for 69 rubles, and yesterday already - 77 rubles. There are no loaves at all cheaper than 50 rubles (and they were just for 38-46 rubles). I don’t buy a loaf of “365” because normal people don’t eat it, a couple of days ago it cost 13 rubles 80 kopecks, and yesterday it was already -15 rubles 20 kopecks Where is the “deflation” here? On the contrary, prices will rise because now importers have increased costs for parallel imports, double-triple logistics and resellers, they have to pay more for double or even triple conversion when exchanging currencies, insurance is more expensive, etc. Yesterday it was reported that retail prices in stores in Russia for some goods have already significantly exceeded the same prices in stores, for example, in such a not cheap country as Great Britain. .
1. GIS
  
  -1
  
  9 June 2022 10: 57
  
  This also surprises me: HOW DO I JUSTIFY HIGH PRICES ON BASIC PRODUCTS? in which there is no import, well, unless you count the final recipient of the profit, whose life is in euros / dollars or other tugriks, BUT NOT IN RUBLES. milk and bread, cereals and sugar - all this is not from imported components. someone will object: what about the equipment? and the tractor? they are imported. I will answer: do you change them every year for new ones, and the old ones for disposal into scrap metal ??? besides, part of the enterprises is still working on the SOVIET (!!!!!) heritage.
  I am also surprised by the silence of the government and face on this matter.
  make gasoline and diesel fuel 2 times cheaper and then follow the markups throughout the chain. for this you don’t need a tough guy, it’s enough to explain why we want to raise our country to those who are on the same path with us. the rest .... reprimand with entry into the case
  1. Monster_Fat
    
    -1
    
    9 June 2022 11: 19
    
    By the way, it is a delusion to believe that there is no "import component" in the main food products. The import component is everywhere, starting from the Siemens turbines that generate electricity, the wires through which it is delivered to the consumer, the switching electrical equipment of the AEG company, etc., in spare parts for machines that deliver and transport ingredients and finished products, in oil additives and fuel for these cars, in the equipment itself, for example, for kneading and baking bread, in the stainless steel itself for various types of molds and pallets, etc. And also in the work of Tajik-Uzbeks who are employed there and then convert their Russian salary into dollars and send to your own home. I recently went to the Yunona market (there is such a universal market in St. Petersburg), there is a professional equipment store for cafes, restaurants, bakeries and agricultural products processing, and so in this store there is nothing at all from the equipment made in Russia, except for pots and trays which, judging by the seals and inscriptions, are made under license. And prices for everything there have doubled compared to January.
    1. GIS
      
      0
      
      9 June 2022 15: 47
      
      I immediately replied to this:
      
      someone will object: what about the equipment? and the tractor? they are imported. I will answer: do you change them every year for new ones, and the old ones for disposal into scrap metal ???
      
      just now, according to FM, they correctly said "all sellers have laid down risks for turbulence, that is, forward 100-150 percent" - that's what I believe.
      as for yours:
      
      By the way, it is a delusion to believe that there is no "import component" in the main food products. The import component is everywhere there, starting from the Siemens turbines that generate electricity, the wires through which it is delivered to the consumer, ...
      
      imported equipment, which is ALREADY WORKING, is probably ALREADY INCLUDED in the expenditure part of product pricing. and going back to the beginning
      
      do you change them every year for new ones, and the old ones for disposal into scrap metal ???
2. Serzh
  
  0
  
  9 June 2022 17: 15
  
  What is classically significant is that the official data does not reflect the real picture of what is happening!