MOSCOW -

On the cusp of the New Year, price hikes are at the forefront of all Russians' talk.

The economic crisis has become the issue of the hour this year, and the main problem for the citizens and the Russian economy, in light of the noticeable acceleration in inflation and the decline in the value of the local currency compared to hard currencies.

Economists attribute the sharp acceleration of inflation in Russia to high prices in global markets, disruption of supply chains linked to the coronavirus epidemic and other factors.

Last November, annual inflation in Russia accelerated to 8.4%, the highest since January 2016. Food prices also rose by about 11%.

The actual rise in prices even exceeded the expectations of the Central Bank and the Ministry of Economic Development.

peak

Last month, Economic Development Minister Maxim Reshetnikov said the ministry had worsened Russia's 2021 inflation forecast from 7.4-7.9% to 8.4% or more.

According to him, inflation in Russia is now at its peak.

The Ministry of Economic Development asserts that the acceleration of global inflation and the limited supply of some commodities in the local market are among the main factors behind the acceleration of price increases in recent months.

According to its estimates, the dynamics of inflation will depend mainly on the timing of stabilization of energy prices in Europe, the cost of transportation and the situation in commodity markets.

Solution

In order to curb inflation and saturate the market with necessary products, the ministry proposed to the government to implement a set of measures, primarily subsidies, preferential loans, export quotas, and fees.

The ministry said that these measures are complementary to the monetary policy tools of the Central Bank.

On the other hand, sites specialized in economic studies indicate that despite the confirmation of the Federal Authority for State Statistics (Rosstat) on a slowdown in inflation, and the entry into force of the state’s plan to achieve a target of 4% early next year, the rise in consumer prices continues rapidly in country.

And unlike Rosstat, which calculates monthly inflation according to a hypothetical basket of several hundred goods and services from nappies to the production of coffins, Rambler Finance compiled an index of consumer goods deflation based on 15 million purchases made by Russian families in 2008. -2020.

According to his conclusion, it was found that the inflation calculated in this way is twice the official figure of "Rosstat" in November, which gives Russia a negative indicator in terms of growth among emerging markets, according to the site.

Economists and analysts expect a rise in consumer inflation in Russia (French)

Inflation was recorded above 17% last November, while in Turkey it is 21.3%, and in Argentina it is 51.2%, in addition to a number of African countries and countries on the verge of economic collapse (Sudan 351%, Syria 139%, Venezuela 1198 %).

The Russians themselves, whose opinion is polled by the Central Bank on a monthly basis, assess inflation roughly the same way as Rambler Finance.

As of this December, the noticeable growth level in prices reached 17.7%, compared to 12.8% at the beginning of the year and 8.3% before the start of the epidemic.

At the same time, one in five citizens (roughly 18% of the country's population) believes it is on the verge of hyperinflation, with prices increasing by 30% or more, according to Finance Row.

One indication of this is that the Bank of Russia has raised the key interest rate 7 times since the beginning of the year.

It also revised its forecast for inflation to increase 4 times from 3.5-4% at the beginning of the year, to 7.4-7.9% at the end.

At a meeting on Dec. 17, the central bank raised the key interest rate to 8.5%, the highest level since 2017, and warned that it would consider further tightening.

Financial analysts - from "Raiffeisen Bank" in Russia - wrote that investors do not yet believe in the beginning of the opposite trend of inflation, against the background of the continuous rise in the prices of raw materials and food products in the world.

overly optimistic

As for the head of the department of commercial operations in the Russian stock market, Georgy Fashenko, he asserts that expectations of a drop in inflation to less than 5% are excessive optimism, and that over time, citizens and businessmen will have to adapt to the new macroeconomic conditions, and coexist with rising inflation.

In the labor market, about 3.3 million people aged 15 years and over were classified as unemployed, and the unemployment rate for the population aged 15 years and over last October was 4.3%, according to the month’s data, while Tatiana Golikova confirmed The Russian Deputy Prime Minister said that the number of officially registered unemployed people has decreased to about two million people since the beginning of 2021.

According to the data of the Russian Ministry of Labor, 1.1 million unemployed citizens were registered in the employment service, of whom 0.8 million were unemployed, and 0.6 million received unemployment benefits by the end of October 2021.

When studying employment and unemployment, the Ministry uses the methodology of the International Labor Organization, according to which the unemployed are those who, at the time of the study, needed a job, were looking for it and were ready to start working in it.

Citizens' opinions

According to a survey conducted by the Foundation "Public Opinion" and published by the agency "Interfax", almost half of the citizens of the Russian Federation (45%) evaluate the current economic situation in the country negatively, 43% consider it satisfactory, and only 5% of them consider it good.

Survey data show that young people who have a higher education and at the same time suffer from financial hardship give a more negative evaluation than others.

The study showed that, according to 59% of Russians, the economic situation in the country continues to change for the worse, and that 69% of respondents aged 31-45 years believed so.

Also, 14% of Russians are ready to believe in an additional improvement in the economic situation.

Most of these optimists are among respondents over the age of 60.

As for 17% of Russians, they are sure that the current economic situation will not improve or worsen.