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Thursday, October 27, 2016

Deflation in Russia, and thank God, experts say

Rosstat recorded a decline in consumer prices from July 25 to August 1, 0.1%. After the publication of these data in the media has appear the headlines that in Russia for the first time in five years, deflation. Can we call this economic term decline in prices that has occurred over the last week, we asked the experts.

photo: Natalia Muslinkina

According to Rosstat, there was a fall in the prices of food commodities, primarily fruits and vegetables during the week they fell by about 3%. Tomatoes became cheaper by 8.5%, cucumbers — by 7.4%, cabbage — by 4.4%, potatoes — by 3.9%, potatoes — by 3.2%. 0.1 % fell lamb, sausage, sausage, fish, flour and wheat. However, buckwheat and sugar continued to go up. But these fluctuations has its own explanation, and not rainbow. So, did he come to Russia deflation?

Yevgeny Gontmakher, an expert of Committee of Civil initiatives:

Of course not. According one week is impossible to draw any conclusions. In the summer of traditionally lower rates of inflation. But all forecasts, including the official that annual inflation will be 6-7%. I think, in August inflation will be somewhere near zero, and then will grow again. Deflation, I hope, never will be. Because effective economic policy is inflation of 1-2%. But long-term deflation does not allow the business to invest for the long term. Because of falling prices for manufactured goods. In some sectors, especially the service, the profit in this case may be close to zero.

Nikolay VARDUL, chief editor of “Financial newspaper”:

The decline in consumer prices often happens in August and September. This occurs including at the expense of our gallant agriculture. But it is appropriate to speak more of seasonal deflation. In the fall of the inflation rate to return to normal. If the predictions were different, the Central Bank would lower the key rate.

Rising prices and a falling ruble. Chronicle of events

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