“A Different Rate of Inflation”
“We have moved to a different inflation rate this year that will be high. Most likely, up to 20% in that range, maybe 17% to 20%,” he said.
Later in a conversation with reporters, the head of the Accounts Chamber said that if Western sanctions continue to apply, the Russian economy will need at least two years to rebuild.
“Of course our economy will need to be rebuilt, in my opinion we need to separate the medium and long term. If sanctions remain at their current level, they will last for about two years, no less. I would say that this is the first phase, and then we will have to rebuild for many years, because we are talking about import substitution for a number of goods,” he said.
Inflation slowdown
Earlier on Wednesday, First Deputy Prime Minister Andrei Belousov spoke at the Federation Council. He noted that weekly inflation in Russia slowed to 0.66% from 2 to 8 April.
“Unfortunately, heavy demand caused a wave of price increases as imports decreased. The government did everything possible to keep this wave as weak and short as possible. However, for the first three weeks after the sanctions were imposed, prices increased by an average of 2% per week. Then their growth started to slow down – now less than 1% a week. The latest data from last week (April 2 – April 8 – socialbites.ca) is 0.66%, ”Interfax quotes Belousov.
The official said consumer prices have increased by an average of 10% since the beginning of the sanctions. The price of the set, called sugar and borscht, increased by 50-60%. The cost of durable food products (salt, flour, grains) increased by 10-20%. The prices of non-food products, which are highly dependent on imports, increased by 16 percent.
According to Belousov, on March 20, consumer demand for socially important goods stabilized, retail trade stocks began to recover and reached the norm for the main groups of goods.
“So, reserves for sugar are already more than 2 weeks, for sunflower oil – more than 5 weeks, flour and cereals – 5-6 weeks, baby food and canned food – 10-12 weeks. “The situation in trade today is stable and under full control,” he said.
Belousov added that “in order to minimize the consequences of a jump in inflation, monetary compensation measures have been developed on behalf of the President of the Russian Federation for pensioners, low-income citizens and families with children.”
accelerating inflation
According to RIA Novosti, the Bank of Russia and the Ministry of Economic Development will present new forecasts in April. The Central Bank also conducted a survey of analysts in early March, according to which it was stated that annual inflation will be 20% in December this year, 8% in 2023 and will slow down to 4.8% in 2024.
According to data based on Rosstat data by Interfax, inflation in the Russian Federation from March 26 to April 1 was 0.99% from March 19 to March 25, after 1.16%, and from March 12 to March 18. a was 1.93% and 2.09% from March 5 to March 11. and 2.22% from February 26 to March 4.
Also, on April 8, Rosstat reportedInflation in Russia rose to 7.61%, and to 16.69% on an annual basis. In addition, the service recorded an 8% increase in consumer prices in 32 subjects across the country.
According to a study by Rosstat, prices of food products increased by 6.73% and 17.99% year-on-year in March compared to February, while prices of non-food products increased by 11.25% and 20.34%, respectively. In March, service cost increased by 3.99% on a monthly basis and by 9.94% on an annual basis.
April 8 Central Bank of Russia statedHe said annual inflation in the country would rise and external conditions for the Russian economy “remain difficult and significantly limit economic activity”. The financial regulator also reduced the key rate to 17.00% per annum.
“Annual inflation will continue to rise due to the base effect, but recent weekly data point to a significant slowdown in current rates of price growth, including exchange rate dynamics. course ruble. The tightening of monetary conditions has been partially offset by the credit support programs of the Government and the Central Bank of Russia, but will continue to contain overall pro-inflationary risks,” he said.
According to the financial regulator, the decision to cut the key rate “reflects a shift in the balance of risks of accelerating consumer price growth, a slowdown in economic activity, and risks to financial stability.”
“The Central Bank of Russia will make further decisions on the key rate, taking into account the assessment of risks arising from external and domestic conditions, the response of financial markets to them, and the dynamics of actual and expected inflation in relation to the target, economic development. The Federal Reserve acknowledges the possibility of continued key rate cuts throughout the forecast horizon and at upcoming meetings.”