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Prices in Russia will rise faster than expected: when the situation stabilizes

In simple terms, prices in Russia will rise faster than the authorities expected.

In simple terms, prices in Russia will rise faster than the authorities expected.

Photo: Timur SHARIPKULOV

For almost the entire year, the government has been assuring that inflation in Russia is decreasing, and by 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, back in April, annual inflation was predicted by the department at 5.3%. The inflation forecast for next year has also changed. The Ministry of Economic Development believes that inflation in 2024 will be not 4%, but 4.5%.

Vedomosti reported this with reference to a ministry document.

In simple terms, prices in Russia will rise faster than the authorities expected. At the same time, as you know, official statistics are a crafty thing and in reality, the inflation that we feel in our wallets turns out to be much higher than officials believe.

According to the Ministry of Economic Development, prices will rise by the end of the year, but then the situation should stabilize. Higher inflation could lead to tariff indexation in 2024 being higher than planned, the document notes.

– Monitoring inflation and making forecasts for price increases is the competence of the Central Bank, not the Ministry of Economic Development. From this point of view, the forecast is not the most convincing. However, the numbers are quite real. The Central Bank itself predicted inflation of 6-6.5%. But most likely, already in September, early October, the Central Bank will change the inflation forecast to at least 7.5%, and maybe even 8%, the director of the Center for Market Research at the Institute for Statistical Research and Economics of Knowledge at the National Research University Higher School of Economics told Komsomolskaya Pravda. Georgy Ostapkovich.

At the same time, according to him, such inflation values ​​in the current situation can be considered satisfactory.

– The ruble is falling, and this is an inflationary factor. Prices for energy resources and gasoline are rising. Manufacturers of many goods and products, including bread, are already announcing that they will increase prices by 5-10%, and this is already beyond the Central Bank’s forecasts, says Georgy Ostapkovich.

At the same time, the expert explains that inflation in the amount of 0 to 10% is classified as “creeping”, and there are enough financial instruments to combat it.

“The main thing is to prevent galloping inflation – above 10%,” explains Georgy Ostapkovich. – Today, 190 countries of the world live in conditions of inflation: the USA, Western Europe, Eastern Europe. And people there don’t starve; they go to cafes. Therefore, there is no need to make a monster out of inflation. 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 – 2.6%.

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