Prices always react with a lag to the fall of the national currency
Photo: REUTERS
“Look at Europe, where inflation is double!” – Just like to wink at the West in such cases, our officials. And formally they are right. But from this there is no money in the wallet anymore, and red caviar does not appear in a roll with butter.
So inflation in Russia for the first time in many months began to grow. On the evening of July 12, Rosstat reported: prices in June increased by 3.25% (compared to the first month of last summer). In May, annual inflation was notably lower: only 2.51%.
The main reason for the acceleration is clear – the depreciation (to put it mildly) of the ruble exchange rate. The fall began in May and accelerated with the arrival of summer. In June, the dollar jumped from 81 to 87 rubles, the euro from 86.5 to 95 rubles.
Why haven’t prices risen as much as the dollar and the euro? There are two points here.
1. Prices always react with a lag to the fall of the national currency. Until now, Russian sellers have old stocks of imported goods purchased at a more decent price. But little by little the range is being updated, and prices are also slowly rising.
2. Now it is summer, the harvest and fruits and vegetables are getting cheaper. And this does not allow the country’s average prices to grow much.
Speaking of fruits and vegetables. They are the leaders in price cuts in June. Tomatoes, onions and plantains fell the most in price during the month (for more details, see “Just numbers”). Among non-food items, televisions, USB sticks and vacuum cleaners fell the most. True, not by much: a maximum of 2%.
Curiously, prices are the ones that have risen the most… Also vegetables, carrots and potatoes. Which is also related to the harvest: these tubers will be massively harvested closer to autumn, now the old stocks are running out, imports are expensive, that’s why prices are soaring. But soon they will definitely fall.
And the cost of vacations has gone up. Trips to our Black Sea and the countries of the Caucasus (Armenia, Georgia, Azerbaijan) added 9% in price, vacations in Turkey rose in price by 6.6%. Everything is clear here: summer is in full swing, demand is high, and no one has lifted the sanctions. Airline tickets, hotels are becoming more expensive, vacations are becoming less affordable. It is true that trips to Egypt and the United Arab Emirates have fallen slightly in price (minus 1.6% and 2.7%, respectively). Yes, only who will fly there now, in these +40 …
What happens next is easy to predict. The depreciation of the ruble in July slowed down, but did not stop. Yes, and the June fall will haunt us again for more than a month; this will especially affect the prices of cars, equipment and vacations abroad. So by the end of the summer, the beginning of the autumn, inflation will accelerate, do not go to Rosstat.
Well at least potatoes and carrots should be getting cheaper soon…
ONLY NUMBERS
What rose the most in June…
Carrot +22.2%
Potato +21.5%
Lemons +16.1%
Beetroot +13.1%
Nursing home services, pensions +9.8%
Holidays on the Black Sea coast of Russia +9.2%
Trip to the Transcaucasian countries +8.8%
…and cheaper
Tomatoes -22%
Onion -13.5%
Bananas -12.4%
Cabbage -10.8%
Cucumbers -5.5%
Fresh herbs -4.4%
Grapes -4.2%
According to Rostat.
