The authorities admitted that they could not keep inflation within 4%. It will be possible to return to this target indicator only in the second half of 2022, according to the analytical commentary of the Central Bank. The regulator stated that consumer prices in May increased by more than 6% in annual terms, and the reason for this was the demand, which seriously exceeds the supply. But the Central Bank is confident that in a year, thanks to the current monetary policy, inflation will return to 4%.
Back in February, the Central Bank predicted inflation for 2021 in the range of 3.5 - 4%. But now he admitted that keeping her within such limits was beyond his strength. The regulator does not undertake to make new predictions, but it has figured out in detail the reasons for the rapid rise in prices: the world markets are partly to blame, but to a greater extent - consumer demand, which so exceeded supply that manufacturers and sellers calmly included in the price lists not only costs, but also increased appetites.
The Central Bank should have set the accents a little differently, because it was clearly not domestic demand that pushed prices up, believes Yevgeny Nadorshin, chief economist of the PF-Capital consulting company: ... “But we can talk about demand in China, in the USA, in a number of European countries, but not in Russia. According to official statistics, there is no sharp surge in demand in our country. And in the first quarter of 2021, the Russian economy was falling by the first quarter of 2020”.
According to the Central Bank, the annual growth rate of food prices in May amounted to 7.4%, for non-food products - 6.7%. Will the regulator be able to return them to the target 4% at least by the second half of 2022? Kommersant FM decided to ask the business about it. And his answers are encouraging. For example, the regulator pays special attention to the rapid rise in prices for building materials - by an average of 16.5% year-on-year, although market players reported a three-fold increase in the value of some items.
Now industry representatives are reassuring: next summer the dynamics will be much more modest. However, before that time the prices will still increase, states the owner of the company "APS Domostroitelny kombinat" Alexander Kalsin: “The current prices will still grow. From September 2020 - up to 50% and will roll back in the first quarter of 2022 by a maximum of 7-10%.Wild price growth will stop by the end of 2021 along with a drop in demand. Next year, probably from the second quarter, they will grow by 4-5% per year. The top officials were interested in the rate of growth in food prices in Russia. Even domestic meat has risen in price, the cost of which has remained stable over the past few years due to overproduction. In 2021, the situation changed, but not for long, says the head of the National Meat Association Sergei Yushin: “Now the pace of poultry meat production is recovering, I hope that by the end of 2021 we, at least, will not be in the red. For pork, we will reach an increase of 4–5%, which will also increase the supply. We predict that prices, at least for producers, will not continue to grow.We will even face a decline in prices, primarily for pork. In 2022, I think, the bird will not rise in price, if, of course, we keep the situation with diseases.It turns out that the Central Bank is right in everything, and it is not in vain that it has raised its key rate three times in a year? The regulator has no great merit in curbing inflation, says Evgeny Nadorshin from PF-Capital. On the contrary, the country will pay for the hasty actions of the Central Bank with a decrease in economic growth, he continues: “The surge in inflation that we are now seeing is a temporary phenomenon. And this deviation would have been corrected by itself without serious efforts of the authorities. And the rate hikes that the Central Bank has made recently will probably not help in any way to fight this inflation, but they will restrain economic activity. Considering that we could not count on higher growth rates than the world average anyway, it is highly likely that most of the optimists will now have to revise their forecasts downward”.
The cost of goods in Russia has only one direction - up. The authorities, analysts and business rarely talk about a pleasant price reduction for the consumer to the levels of previous years. That is, while the success of economic policy is considered a rise in price not too fast.