Simply put, prices in Russia will rise faster than authorities expected.
Photo: Timur SHARIPKULOV
For almost the entire year, the government has been ensuring that inflation in Russia is declining and that in December it will be much lower than initial forecasts.
Now, apparently, the situation has changed. The Ministry of Economic Development raised the inflation forecast for 2023 to 7.5%. For comparison, in April the department predicted that annual inflation would be 5.3%. The inflation forecast for next year has also changed. The Ministry of Economic Development believes that inflation in 2024 will not be 4%, but 4.5%.
This was reported by Vedomosti citing a ministry document.
Simply put, prices in Russia will rise faster than authorities expected. At the same time, as you know, official statistics are a tricky thing, and in reality the inflation we feel in our wallets turns out to be much higher than officials believe.
According to the Ministry of Economic Development, prices will rise at the end of the year, but then the situation should stabilize. Higher inflation could lead to rate indexation in 2024 being higher than expected, the document states.
– Monitoring inflation and making price increase forecasts is the responsibility of the Central Bank, not the Ministry of Economic Development. From this point of view, the prognosis is not the most convincing. However, the figures are quite real. The Central Bank itself predicted inflation of 6-6.5%. But most likely, already in September or early October the Central Bank will change the inflation forecast to at least 7.5%, and maybe even 8%, said Georgiy Ostapkovich, director of the Market Research Center of the Statistical Research Institute and Economics of the Czech Republic. Knowledge at the Higher School of Economics of the National Research University, said Komsomolskaya Pravda.
At the same time, according to him, these inflation values in the current situation can be considered satisfactory.
– The ruble is falling and this is an inflationary factor. Prices of energy resources and gasoline are increasing. Manufacturers of many goods and products, including bread, are already announcing that they will increase prices by 5% to 10%, and this already exceeds the Central Bank’s forecasts, says Georgy Ostapkovich.
At the same time, the expert explains that inflation of 0 to 10% is classified as “slow” and there are sufficient financial instruments to combat it.
“The main thing is to avoid rampant inflation, above 10%,” explains Georgy Ostapkovich. – Today, 190 countries in the world live in conditions of inflation: the United States, Western Europe, Eastern Europe. And people there are not starving; They go to cafes. Therefore, there is no need to turn inflation into a monster. If socially vulnerable segments of the population receive bonuses from the state when inflation rises, benefits and pensions are indexed (and our authorities always do this), then there is nothing to worry about. The main thing is that inflation is predictable and there are no high inflation expectations.
By the way, as follows from the updated forecast of the Ministry of Economic Development, the growth of real disposable income of the population in 2023 will be about 4.3% (instead of 3.4% in April). But next year growth will slow down and amount to 2.7%, in 2025 to 2.6%.
