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Thursday, February 22, 2018

The rise in prices has stopped, but only for a while

After two weeks of purely symbolic “zeropad”, Federal state statistics service in mid-August has recorded zero growth in prices. That is, according to official statistics, it is the balance – “price lists” froze. Now the question is: what will happen to these swings? Experts predict that after starting to run out stocks of the new harvest, the rising cost of consumer goods will continue. So in the fall the economy will again enter into an inflationary tailspin.

photo: Gennady Cherkasov

According to Rosstat, in August last week the cost of fruit and vegetable products continued to decline by an average of 3.4%. Fresh tomatoes and 9.3%, cabbage, potatoes, carrots and cucumbers — 4-5,8%. However, this is not surprising. This group of products in the summer was always at the expense of local producers. Quite a bit fell by 0.1% beef, fish and chicken eggs.

But buckwheat prices increased by 0.6%, pork, sausage, butter, sugar and caramel — 0,2-0,4%. Prices for gasoline and diesel fuel what were such and remained.

According to financial analyst of “Finam” Timur Nigmatullin, prices are reduced by new crop harvested our agriculture. In addition, this summer seasonal factors superimposed effect of the relative strengthening of the ruble.

Not coincidentally Rosstat from 26 July to 1 August 2 through August 8 for the first time in five years recorded a deflation of 0.1% per week. Of course, what that “victory” too early. Still, in annual terms inflation on 8 August was at the level of 7,1%, and if you count from January 1, 2016 is 3.8%. The Ministry of economic development predicts the end of 2016 the growth of prices by 6.5% and in 2017- by 4.9%.

As always peculiar to these trends reacted VTSIOM, which conducted the actual survey on “rising prices yesterday and today.” Expert service Oleg chernozub, commented on the results of sociological research: “since the end of 2015 the public consciousness captures the gradual cessation of significant growth of prices for most of the studied product groups”. I wonder in what sense people have managed to “fix in your mind” the decline in prices by 0.1%? It is not clear.

In fairness, I must say that polls confirmed that more than half of the respondents still believe that the products are expensive. 60% of respondents are confident that more all has grown the prices for meat and meat products. Almost as many said the rising cost of milk, bread (53%) and cereals (49%).

In General, while we should not delude ourselves foreign word “deflation”. Incomes are falling and with zero inflation. Rosstat updated information about the real incomes of Russians. In July, in annual terms they declined by 7% in June to 4.6% in may to 6.2% in April – 7%. Overall, from January to July, real incomes declined by 5.3%. The average monthly salary of Russians amounted to 36.5 thousand rubles.

Some experts believe that the collapse of the ruble in the future is inevitable, and therefore there will be a new jump of the prices. “The policy of austerity, which currently gives some money, some time will create a more serious, more powerful base for the crisis and will lead, ultimately, to a large devaluation. – said the head of the center for economic research Institute of globalization and social movements Vasily Koltashov. For default on state obligations of the prospects are seen, but the fall of the ruble obvious”.

“Our government has learned from the default of’ 98, noted another expert, Advisor to General Director BK “Opening” Sergey hestanov. – However, the attempt to stabilize the domestic currency before the September elections to the state Duma can play a fatal role in the economy. It is much more likely that we will see a managed devaluation”.

Rising prices and a falling ruble. Chronicle of events

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