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Thursday, March 15, 2018

The Ministry of Finance predicted a drop in prices at the end of the summer

Recently high-ranking officials began to compete in the contest “most original idea”. Last week, presidential aide Andrei Belousov suddenly complained of a strong ruble, based on a perceived threat to the budget. And on Monday, Deputy Minister of Finance Maxim Oreshkin announced an “unexpected” decline in prices in the coming August. Newly Nostradamus has been in crisis the intricacies of the domestic economy to see the prerequisites for “a little deflation”. This, of course, a sensational statement, given the fact that the prices of seasonal food in late summer did not grow neither in 2014 nor in 2015. Not to mention other more prosperous times.

photo: Alex geldings

What groups of goods, food or industrial, will decrease the value, Maxim Oreshkin explained. Perhaps, the official talked about the food, and maybe was referring to the General index of consumer prices — that is to say, “the average temperature in the hospital”. Because building materials, school supplies, clothing, automotive fuel in August, as a rule, expensive.

By the way, in the market the emergence of deflation could still testify about the lack of money in circulation, the low level of effective demand, the consumer slowdown and investors. Perhaps the Deputy Finance Minister had in mind something from this Opera.

“MK” is holding its monthly price monitoring. Since the beginning of summer traditionally falling cost of fruit and vegetables, bakery products, due to seasonal growth of their suggestions. In July, falling to cucumbers and tomatoes sided with onions, potatoes, cabbage, peppers, zucchini, eggplant, carrots, apples. Prices for other food products do not change.

It is not excluded that in the near future to reduce the cost of food will contribute to not only a good crop, but the abolition of the Turkish embargo. However, even in this case, the “price fall” should not count for the fruit and vegetable products from Turkey will be allowed certainly not before the autumn, and then only in a truncated format. For example, tomatoes are at risk to be banned.

However, no matter how much you convince, say, “flown — cheaper”, and people in any case do not expect a global improvement of the situation on the food markets.

According to the July polls, “Levada-Center”, 36% of Russians noted the rising cost of goods and services that their family buys, on average, 15-30% compared to the summer prices in 2015. 31% believe that prices have increased by 30-50%. An increase of 50-100% said 13% of respondents.

“This year, we can expect that inflation would be at 7-8% (last year was almost 13%. — “MK”). However, even these indicators are not favorable for the normalization of the macroeconomic situation. Need to inflation did not exceed 2-3%. And so we see that our economy was in crisis, so it remains,” says the head of the Center for social policy Institute of Economics Eugene Gontmakher.

Of course, in September-October, when stocks of the crops begin to dry up, inflation in the country will resume, and their level will depend primarily on the dynamics of national currency exchange rates and hydrocarbon prices. This was confirmed by Deputy Minister of Finance Maxim Oreshkin. From his point of view, the exchange rate reflects the balance of payments and current oil prices”. Well, if this doesn’t work, he’ll probably find other reasons for price fluctuations.

Rising prices and a falling ruble. Chronicle of events

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