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Saturday, March 24, 2018

Putin promises to reduce inflation to 5.7% this year

Russia confidently overcomes the difficulty. At least believes Vladimir Putin. According to the President, at the end of 2016, the inflation in our country will account for 5.7%. For comparison, the head of state noted that last year, it reached 12,9%. Now the prices has slowed. Thus, according to the latest data of the Central Bank, on 12 September, the annual inflation rate decreased to 6.6%. Recall that the regulator has set itself the goal in 2017 is to reduce this figure to 4%. Justified hopes of the President, “MK” asked the experts.

photo: Gennady Cherkasov

“We go confidently in the direction of overcoming difficulties. Let me remind you last year on such a key parameter, as inflation was at 12.9%. And this year is 5.7%. First talked of 5.9% and is now 5.7 percent,” — said Vladimir Putin at a meeting with leaders of parliamentary parties.

In addition, as noted by the head of state, “went up the indices of industrial production”. According to him, “they are still insignificant, but the trend continues from month to month.”

Alexei Antonov, an analyst at ALOR BROKER:

“This official statistics the inflation rate was always somehow detached from real life. Yes, it is calculated out of the average consumer basket, but if you go to the grocery store, we see that for 8 months of 2016 the food products rose by no less than 10-15%. Besides, by the end of the year inflation always has a tendency to accelerate, and, according to our forecasts, in November-December, it will be no less than 0.7% in each of the months. September and October is expected at 0.5% a month, thus until the end of the year can put up to 6.3-6.4%. And it is only under the condition that the oil will be in the range of $43-47 per barrel, from which it is now trying to break down. In addition, the Central Bank recently lowered its key interest rate from 10.5% to 10%, which will increase pressure on the ruble and inflationary pressures increase. It is planned to introduce new rates of major taxes — VAT, personal income tax, and this will mean a massive rise in prices. Another growth factor is the idea of the government is the indexation of pensions to issue to all pensioners to 5 thousand rubles. This direct pumping cash economy can not lead to inflation”.

Georgiy Vaschenko, head of operations on the Russian stock market IR “freedom Finance”:

“According to the latest forecast of Ministry of economic development, inflation by the end of 2016 will amount to 5.8%. However, to achieve this indicator will be difficult, since GDP growth this year is missing, and the money supply continues to grow by more than 10% per year. Moreover, even if the oil price in 2017 will rise to $50 per barrel, and the surplus will be withdrawn in the Reserve Fund, the GDP growth still does not exceed 2.1 percent. In addition, the budget deficit also will not be able to completely overcome at a price below $60-65 per barrel. Thus the money supply will continue to grow faster than GDP. To reduce inflation below 7% in such conditions is dangerous.”


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