Analyst Belyaev predicts annual inflation of no less than 10%
As data from a sociological survey commissioned by the Central Bank show, inflation expectations of the population continue to grow in July. From 11.9% in June to 12.4% this month. In general, Russians do not see a trend towards cheaper goods — even in the upcoming vegetable harvesting season.
More than 2,000 people from all over the country participated in the InFOM survey commissioned by the Bank of Russia. At the same time, respondents without cash savings have inflation expectations of 14.5%. And among citizens with nest eggs for a “rainy day” they are slightly lower – 10.3%. Well, there were no Russians at all who would believe the promises of the monetary authorities that inflation at the end of 2024 would be single digit.
In general, Russians clearly think differently than the Central Bank analysts. We will find out who will be right in this dispute at the end of the year; there are still almost six months left.
One thing is indisputable: inflation in Russia continues to accelerate. According to Rosstat data for June, prices have increased by 3.88% since January, and in annual terms inflation reached 9.2%.
To counteract rising prices, the regulator is focusing on tightening monetary policy. Therefore, the issue of raising the key rate at the next meeting of the Board of Directors of the Central Bank on July 26 is a decided matter, no one is arguing about it. The only question is by how much percent will it be raised from the current 16%?
Some hotheads suggest making 20% at once in order to deal a crushing blow to prices. However, critics point out that the 20% rate was introduced by the Central Bank only at the end of February 2022, when there was force majeure, the SVO began, sanctions came, and the ruble collapsed to 120 per dollar. It turns out that after almost 2.5 years of fighting against rising prices, we have returned to the same indicators from which we once started this fight?
In a word, many experts agree with the Russians: you can’t fool the people. The Central Bank's monetary policy, no matter how hard it is tightened, will not be able to reduce the growth of inflation. Among the many factors that accelerate it, observers also name the lack of competition in the economy, which leads to the dictate of prices by monopolists. In particular, this is the opinion of financial analyst, candidate of economic sciences Mikhail Belyaev.
– Since people are guided by prices in the store, and they are growing the fastest for consumer goods, people’s expectations of price increases are accelerating.
– To include expected inflation in actual inflation.
– In fact, among the strong inflation factors, expected inflation is somewhere around 25th place. And the regulator is moving it to first place. It proceeds from the fact that prices are rising due to the excess money supply among the population, which needs to be limited with the help of a tight monetary policy. The Central Bank uses the expected 12% inflation as an argument in favor of pursuing an even stricter policy, raising the key rate at the next meeting of the Central Bank's board of directors.
But that’s not the issue with us at all. In Russia, prices for goods are raised by monopoly companies. To do this, they use every little opportunity. Let’s say that gasoline prices have risen by 5% and the cost of transportation has increased. But the monopolist raises the price not by 5, but by 20 or 30%. There would be a good excuse.
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– In the country, no one really looks at pricing; there is no established control system. From time to time, if the president slams his fist on the table, as was the case with prices for sugar and sunflower oil, the FAS gets involved. And antimonopoly officials must constantly respond if prices are raised biased and disproportionately. You say that instead of one kilogram people buy three of some cereals. Trade, seeing such readiness, raises the cost of the goods. However, increased demand is not a reason for new price tags on the shelf. Now, if there is a shortage of goods, prices rise on the market. But we haven’t had any shortages for a long time, buy as much sugar or buckwheat as you want! Monopolists use this moment to their advantage.
– I believe that it is not lower than 10%. After all, we are not waging any serious fight against monopolism in the economy. We will continue to tighten monetary policy. But this will not stop prices from rising.