Inflation in Russia will start to add 2% per month

Rising prices for imported goods will hit the pockets of citizens

Inflation in Russia remains at one of the lowest levels in the world. According to Prime Minister Mikhail Mishustin, from January to July, consumer prices in our country rose by only 2.9%. In turn, the ruble exchange rate over the same time against the dollar and the euro fell by a third. At first glance, a clear contradiction arises: the national currency, which has a serious impact on the acceleration of the cost of goods in stores, is weakening day by day, while government statistics show that there is no need to worry about this – the collapse of the “wooden” rather sluggishly puts pressure on price tags. According to MK experts, the situation is quite objective, but it is too early to rejoice, since inflation will begin to grow in the second half of the year and reach 6-8% by December.

Igor NIKOLAEV, Chief Researcher, Institute of Economics, Russian Academy of Sciences:

“In addition to the ruble exchange rate, many factors affect the inflation rate. Take, for example, imported goods. Of course, their cost has increased this year, but in the first months, foreign products continued to be purchased at the old prices, which in general became the reason for the appearance of some inflationary immunity in consumer prices. In addition, due to a very nominal growth in incomes (in the first quarter they increased by only some 0.1%), the population began to be more restrained in their spending. Representatives of the trade sector immediately drew attention to this and did not hurry with a significant increase in prices in stores. However, there is a turning trend. The Central Bank has already warned about inflationary risks in the second half of the year. So far, this is imperceptible – earlier government inflation forecasts were at the level of 2.1%, but in fact we got 2.9%. This seems to be a trifle gives reason to assume that in the near future the rise in prices will begin to gain momentum and seriously exceed the current values. As for the ruble, its position promises to strengthen. At its next meeting, the Bank of Russia intends to raise the key rate, which will serve as an incentive to support the national currency. Of course, the ruble will not win back the loss of 30%, but the tightening of the state’s monetary policy will definitely give confidence to the “wooden” in the exchange rate confrontation with the dollar and the euro.”

Sergey SUVEROV, investment strategist at Arikapital Management Company:

“The Russian currency, whose exchange rate last spring fell to the level of 105 rubles per dollar, by the end of the year has almost doubled to this mark. Inflation, on the contrary, turned out to be prohibitive, reaching a level of about 12%. Such dynamics confirms the fact that the movement of both important economic indicators can be multidirectional: at a time when consumer prices are rising, the currency is quite capable of strengthening, and vice versa, when the ruble is falling rapidly, inflation can be kept within reasonable limits. However, do not relax. Imported goods usually rise in price with a certain time lag, and the day is not far off when the cost of foreign products will go up by leaps and bounds, which will immediately affect the price of domestic products. It won’t be strange if a relative equilibrium sets in in the second half of the year: the ruble will catch up due to an increase in the key rate, and inflation will start to grow rapidly and by the end of the year will overcome the bar of 6-7%, and maybe even 8%. Fracture, most likely, is worth waiting for in the fall. It is not difficult to calculate that starting from September, prices in stores will increase by about 2% per month.”