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Sunday, January 21, 2018

Record low inflation still too early to rejoice

Photo: Nikolay Gyngazov/Global Look Rgege next year minimum wage (the minimum wage) should be compared with the cost of living. The job has given Vladimir Putin. The state Duma has promised to enact as soon as possible. Thus, the minimum wage equal to the subsistence minimum for the first time, although it has declared in recent years. Will this help in the fight against poverty? Details…

  • China has sharply reduced import of waste from USA
  • Expert: Tyumen reached the fourth place in Russia on volume of housing
  • Average check of Russians during one trip to the store has exceeded 500 rubles

Go to a section…”Sevastopol should become the southern capital”Photo: Vasily Batanov/RIA “news”,”If you spend time on the constant scandals, public discussion, and to care in other planes other than work, then you have nothing useful happens” – said the newspaper VIEW, the newly elected Governor of Sevastopol Dmitry Ovsyannikov. In particular, he commented on the subject of previous disagreements with the team of his predecessor Alexey Chaly. Details…

  • The Ministry of foreign Affairs: Problems with the DPRK resulted from the overthrow of Gaddafi in Libya
  • Moscow urged Washington to give the restriction of military contacts
  • Clinton declared a “personal vendetta” Putin after NATO enlargement

Go to a section…”to Turn Victory Park into a Museum not normal”Photos: spravka.sevas.com”Sevastopol has a glut, where virtually every square meter of the monuments. Residents even said that there are already enough” – said the newspaper VIEW Nadezhda Vinokurova, chief engineer of “Institute Novgorodgrazhdanproekt”, developed the project of reconstruction of Victory Park in Sevastopol. Details…

  • Rocket “Soyuz-FG” was launched from the Baikonur cosmodrome with a manned spacecraft “Soyuz MS-06”
  • In the movement “forty times Forty” did not agree with Govorukhin and Medina on “Matilda”
  • Andrey Urgant commented on the quarrel of son with Solovyov

Go to a section…the United States remained a gap, a critically vulnerable to nuclear attackPhoto: Workman/WikipediaРассуждающие about the prospect of nuclear war between the US and the DPRK think in terms of a missile strike, the benefit is for the missiles, Pyongyang has bet. Meanwhile, it is obvious that such an attack is impossible. But it is theoretically possible the other is also nuclear and so devastating that America after he did not recover for a very long time. Details…

  • The number of victims of hurricane “Irma” reached 55 people
  • Maduro agreed to the dialogue between the Venezuelan government and the opposition
  • North Korea has rejected a new UN security Council sanctions

Go to a section…”Arrow from Ivanteevka” was inspired by the American experiencePhoto: from the personal pages vk.com the alleged shooter”Ivanteevka is a very beautiful, prosperous city with good, proper social environment. We need to understand what pushed a young man to such actions,” – said the newspaper VIEW Duma Deputy from the Moscow region Sergei Zhigarev. A student opened fire in class, according to classmates, was different unsociable disposition, however, he did not hide his intentions, no one took the example. Details…

  • The building of the Federation of Jewish communities in Moscow threw “Molotov cocktail”
  • In Samara, an anesthesiologist was accused of raping patient
  • In an accident with a drunk policeman in Moscow killed a motorcyclist

Go to a section…

Eduard Birov: Where did the “Orthodox LIH”

Media horror story “ISIL is terrorizing the Orthodox culture”, it seems, may be one of the main subjects of liberal propaganda in the new political season leading up to the elections of the President.
Details…Discussion: 23 comments

Andrew Schmidt: Why Russia is easy to do business

What we in Germany took years of painstaking work, managed to do in Russia for a few months at a comparable budget, and he’s always at the start of several thousand euros.
Details…Discussion: 15 comments

Yevgeny Satanovsky: the Arc of the armistice

What are the chances of eradicating the “Islamic state” as a tool of influence in the middle East the Sunni elites in the development of the situation in the Muslim world? The IG is not the structure, the aim of which was the establishment of a Caliphate.

    Go to a section…

    Online marathon “election Night – 2017”

    Discussion: 7 comments

    Putin held a plenary meeting of the Eastern economic forum

    Putin held an open lesson “Russia looking into the future”

    Discussion: 9 comments

      Go to a section…

      Defined “Miss America – 2018”

      For the first time in the history of the contest “Miss America” winner was the representative of North Dakota. 23-year-old Kara Mundu is the USA champion, and six years ago was marked by Obama for his merits in the field of philanthropy. Local media and bloggers, however, the winner dubbed the “fatty”Details…Discussion: 21 review

      “Irma” flooded Miami

      The popular American resort of Miami in Southeast Florida, like many other cities of the coast of the Atlantic ocean, was almost flooded after a hurricane swept “Irma”. Only in the de-energized state of 3 million buildings evacuated nearly 6.5 million of itemattribute…

      Musk first showed SpaceX space suit in full growth

      Elon Musk in his blog posted photos of the new SpaceX space suit in full growth. Prior to that, he showed the helmet and upper part of the protective space suit. The man in the suit standing on the background of the ship Crew DragonПодробности…Discussion: 11 comments

        Go to a section…For whom do you support in the conflict between Saakashvili and Poroshenko?

        • I wish you success Saakashvili
        • I wish success to Poroshenko

        Alexey Chaly invited to make a Patriotic Sevastopol the capital of Russia. How do you feel about this idea?

        • Support
        • Patriotic capital should be another city
        • Patriotic do not need the capital

        Ramzan Kadyrov has expressed its disagreement with Russia’s position regarding Myanmar. Is it acceptable that the head of the Russian region publicly challenged the country’s foreign policy (which is not true to his official authority)?

        • Yes, a politician can always defend its position publicly
        • No, in this case, it’s insubordination
        • All depends on the personality of the head region

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          News of the HOUR:North Korea has rejected a new UN security Council sanctions

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          in your opinion

          For whom do you support in the conflict between Saakashvili and Poroshenko?

          The growth of trade with China challenges the Economics Russianlolita found ways to add extra budget trillionage low inflation still too early to rejoice

          Russia has achieved what a few years ago seemed impossible – inflation fell to a record since 1991 increased 4%. It would seem that such a significant milestone should encourage the growth of the Russian economy, because of inflation – a theoretically – depends on the level of loans and rates. However, many of the reasons, according to analysts, the lower inflation is to the economy almost completely.

          As of may 15, inflation in Russia has already reached the target at 4%, according to the Inflation pattern of economic development. In March, she was 4,3% in April and 4.1%, and finally, in may of happened is what is so sought, the Central Bank and what is required in 2016, also President Putin.

          “The decline in the rate of inflation today, contrary to expectations, the economy is almost completely”

          The main contribution to inflation was made by the increase in the growth rate of prices for fruit and vegetables to 4.7% month-to-month. Whereas in March and April, they rose in price not so much by 0.6% and 0.3% from month to month. The growth in vegetable prices in may is largely due to the fact that in the previous month, vegetables rose in price slightly.

          If the ruble will remain at the current level (56-57 rubles per dollar), then by December, the inflation may decline altogether to 2.9%. However, in the baseline scenario, the ruble will be weaker, and inflation at the end of the year will amount to 3.8% year on year, forecasts the Ministry of economic development.

          The Central Bank confirmed that the low inflation environment we live 80% of the population, said the Director of the Department of monetary policy of the Central Bank Igor Dmitriev. However, the Central Bank still expect that in may, inflation is still slightly above the target. “Our forecast for may was 4.1% plus or minus 0.1 percentage point. The may year-to-year – 4-4,2%,” – said Dmitriev. Inflation is a living organism, so it is difficult to set at around four percent.

          Such low annual inflation – really unique victory to Russia today: such value since 1991, we have not yet reached.

          “The situation unique is the fact that in the history of modern Russia so low rates of inflation, in the period of 2016-2017 years, was never – confirmed the General Director IK “Forum” the novel Parshin. As close as possible to the current figures are only the levels of 2011, when the annual rate was only 6.1%”. For comparison: in 2012 and 2014 inflation was already above – of 6.58% and 6,45%, respectively. That is the lowest inflation observed since the crisis. Plus periods of slow inflation in Russia is closely linked to the cycles in the commodities market. “You can trace a direct correlation between the strengthening of oil and the slowdown of inflation, which is logical, given the fact that the ruble is still tied to the barrel,” says Parshin.

          Yet, we should not rejoice in such a victory. First, only on one this indicator should not be relied upon as an indicator of the economic well-being. “I’m not sure which is better – inflation of 4% and zero GDP growth, or, say, 20% inflation while the GDP growth of 10%, as it was in 2000,” says Kirill Yakovenko from “ALOR Broker”. Because important other indicators, in particular the presence or absence of investment, the ruble, the level of consumer demand and Low inflation is good, however, the economy of Russia as a whole is in a much more fragile position than a few years ago.

          How can I increase the inflation rate of 4%? Due to the extremely tight domestic policies and favorable external factors. First, due to the high for the current state of the economy in the key rate of the Central Bank. Secondly, due to sterilization of money supply through the withdrawal of licenses from 300 banks. Thirdly, due to capital carry-traders who actively invest in ruble assets, and thus support the ruble, says Yakovenko. While in real life the rate of inflation is 4%, and about 8-10%, judging by the cost of a real, not a statistical consumer basket, he said.

          So expect a large stimulus for the economy from such low inflation is not necessary. Interest on loans gradually declining, however, the key rate remains hard to call low. The price of food and goods down on the background of such low inflation won’t either, except that a seasonal decline in vegetable prices. “In Russia, a so-called ratchet effect, when prices either stand still, or grow, because the overall uncertainty of the situation makes sellers all the time to lay in the price of future rising costs, such as those associated with administrative regulation and the role of the state in the economy, which is approaching 70%,” – says Yakovenko.

          For the population, in his opinion, this situation means no more than a temporary respite and the opportunity to buy the currency at a good rate until the next round of devaluation of the ruble. To take the consumer credits today, he said not a wise decision, but a long mortgage loan is quite possible. “After 10 years, the monthly payment due to the devaluation and depreciation can become quite imperceptible to the family budget. As it is now weakly noticeable monthly payment in the 10-12 thousand rubles for a mortgage, taken in 2005,” says the source.

          For industry and agriculture, the reduction of inflation without the growth of consumer demand, too little meaning. Expensive loans in the corporate sector remained in crisis this is not the main problem. Because when demand is low is not necessary and additional funds to expand production or warehouses.

          The decline in inflation is happening today in completely different conditions than in 2011. namely real income and consumption did not grow neither in the past nor this year. “Thus, the decline in the rate of inflation today, contrary to expectations and tradition, is the economy almost completely, that is not producing tangible benefits,” summarizes Parshin.

          Everything else, on achieving the Central Bank’s desired target of 4% inflation to stop in any case impossible. Now the main objective of the Central Bank and the government will keep inflation close to the targets that will be extremely difficult to do given the impending seasonal factors and a fundamentally strong ruble.

          And if the government and the Central Bank will not cope with this task, then Russia will face either a return to high inflation or escape deflation.

          “Elections are approaching, and that means there will be a lot of populist pre-election spending, which will give inflation a new boost, and it may reach 6-7% in 2013” – does not preclude the analyst of “ALOR Broker”.

          Parshin is waiting for deflation, and this summer. “The ruble since the end of the fourth quarter has become so fundamentally strong that de facto already out of control: “to besiege” national currency is not possible with the help of verbal interventions of the government, promising the imminent collapse of the ruble, nor the Ministry of Finance, flood the markets with liquidity in the framework of the daily interventions of the Central Bank nor through a permanent rate reduction, or even oil, still prone to periodic adjustments to levels below $ 50,” says General Director IK “Forum”.

          And deflation – the thing is extremely unpleasant. With deflation periodically fight the developed countries in Europe and the United States, including by raising the key rate.

          “First, deflation in Russia in for one year can reverse all the victories in the field of import substitution and to make the business unprofitable Russian farmers. Second, to combat deflation, the Central Bank will have to lower the rate, but too low rates will lead to the fact that the banking sector will begin to crumble,” says Parshin. Finally, in the sphere of consumption, deflation may lead to the formation of a funnel, i.e. a reduction of consumption by consumers of expectations of still lower prices.


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