The rise in inflation, according to the results of September, according to Rosstat, reached an indicator of 7.4% on an annualized basis – the maximum in five years, caused a huge resonance in society. Until now, it was believed that the main driver of price growth in the country is food. But the Ministry of Economic Development and Trade unexpectedly dispelled this myth, promising that the goods of the non-food group would rise in price by the end of the year even more. According to the experts interviewed by “MK”, the largest increase in prices by the end of the year will be observed in the segments of building materials, tobacco products and cars. Our interlocutors named goods that will rise in price more than others by the New Year.
Cigarettes in the second half of 2021 may rise in price to an average of 140-145 rubles per pack from 135.8 rubles in the first half of the year, analysts from the operator of fiscal data, OFD, reported. It is noteworthy that there is no actual reason for the increase in the cost of tobacco and tobacco products, since all the indexation of taxes and excise taxes have long been taken into account in prices. However, there are many indirect factors that affect the pricing of the tobacco market.
Yuri Baranchik, Deputy Director of the RUSSTRAT Institute, comments: “The cost of cigarettes and tobacco products may grow by 4-7% by the New Year due to the growth in the cost of raw materials: after all, many types of tobacco, paper, filters are imported by our manufacturers from abroad. In addition, the excise tax on tobacco products usually grows since January, therefore, on the eve of the rise in prices for cigarettes, the producers themselves set a certain increase in their cost by the end of the year ”.
Clothes and footwear
Clothes, footwear, accessories are becoming more expensive all year round and will continue to rise until the end of December. The reasons are an increase in the cost of oil (it is used in the production of rubber and rubber, this affects the cost of shoes), an increase in world prices for cotton, wool, flax and other materials, an increase in logistics costs on a global scale. Of the purely Russian factors – an increase in the costs of manufacturers for housing and communal services, transportation, imported components (buttons, zippers and other components – we buy all this from China or other Asian countries).
Anna Bodrova, senior analyst at IAC Alpari, comments: “The cost of clothing and footwear in retail is based on the factor of logistics, labor remuneration, and an increase in the price of raw materials – fabrics, accessories. The seasonal (winter) surge in demand for outerwear and warm footwear with accessories may ultimately understand the price tag for clothing up to 20%, but for many types of clothing and footwear this rise in price has already taken place. “
The cost of cars does not rise linearly. Interruptions in the supply of microchips and components for cameras or high-tech equipment are taken into account by sellers – this affects, first of all, the complete sets of cars offered for sale. With a high retail price, the offer is now much more modest. Usually, retail prices for cars rise 1-2 times a year – when a new model year of production appears and if currency rates jump. This year, prices for foreign-made cars were understood at least four times, sellers explain this by the vacuum of the manufacturer’s supply. Against this background, the price tag can really grow indefinitely.
Yuri Baranchik comments: “Cars began to rise in price a year ago, this year the average growth in the cost of new cars in the economy segment was 25%, in the premium segment – 12%, business class – more than 15%. The reason is the rise in the cost of metals, the lack of chips, the rise in the cost of logistics (the cost of sea freight this year has grown 10 times). In addition, the rise in the price of oil on the world market leads to an increase in rubber prices, which affects the price of automobile tires and other components, the raw material for which is oil. Before the New Year, the average growth in prices for cars of different classes in the Russian Federation may be 3-5% to the current level. “
Building materials have risen sharply this year amid increased demand in foreign markets – as the economy recovers from the pandemic, different countries needed much more metal products, cement and mixtures than a year ago. In the first half of this year, the rise in prices for building materials averaged 15% to 80%, and prices for certain items doubled. Warehouses after lockdowns were empty, orders increased several times at once, which led to a certain deficit and an increase in prices.
Anna Bodrova comments: “The situation with prices for building materials does not look healthy, there are features of both dumping and monopoly. With the arrival of autumn, some of the construction projects stop, which may affect the decrease in demand for building materials, but this connection is unlikely to be clear and clearly visible. Prices for building materials will continue to rise as long as it is more profitable to sell them for export. There is no upper limit for the increase in prices for building materials – it can be 10% by the end of the year, and maybe 50% for a number of items. “
As for gasoline, the pricing is rather complicated. In the retail price of a liter of Ai-95, two-thirds of the cost is taxes, duties, excise taxes. Everything else is production, logistics, salaries, the price of the raw materials themselves, and so on. Due to the increase in costs in these segments, prices are rising. At the same time, the government restrains the cost of gasoline at retail, at gas stations due to the damper mechanism, which operates for large energy companies in the country.
Yuri Baranchik comments: “Gasoline, which has risen in price on average in the country by more than 6% since the beginning of the year, is likely to slow down the growth rate. The autumn surge in cost growth that occurred in mid-September was justified by the shutdown of a number of Russian refineries for scheduled repairs. At present, the enterprises are operating as before, there are no fears of a shortage of fuel in Russia. At the end of the year, the growth in the cost of gasoline will be within the framework of inflation (7.6% at the moment), as predicted by the Ministry of Economic Development. “
Perfumes and cosmetics
The Ministry of Economic Development proposes to increase duties on perfumes and decorative cosmetics imported from the European Union. The amount of new fees, the department has not yet determined. These measures are presented as a response to EU sanctions on the supply of metallurgical products. If it becomes known in advance about the introduction of duties on perfumes and cosmetics, then before the new year the corresponding products on the shelves may show price growth – sellers and suppliers will play ahead.
Yuri Baranchik comments: “If the government increases import duties on perfumes, eau de toilette, skin care products, the cost of foreign goods for consumers will increase by 5-30%, depending on the category.”
Taxi prices may rise due to higher prices for gasoline, other fuels and lubricants, and methane. The rapid acceleration of inflation and a sharp increase in debt load are forcing more and more Russians to cut spending on basic necessities. According to recent opinion polls, 43% of Russians reported a noticeable increase in spending. According to these data, the zone of inflationary disaster, in particular, was the rise in prices for transport and taxis – 38% of respondents named it.
Anna Bodrova comments: “In the cost of taxi services, the price of fuel, the level of wages, and the state of traffic matter. All this directly affects the final price of the trip, and in the autumn-winter period the prices usually become a little higher, by 2-5% on average ”.
Prospects for price growth until the end of the year
Mark Goykhman, chief analyst at TeleTrade: “The main reasons for the rise in prices do not weaken their effect. Among them, external factors play an important role. In particular, the continuation of “pumping” money into the real sector from the world’s leading central banks. An energy crisis with multiple soaring prices for fuel and electricity, which makes goods more expensive, leads to a reduction and even a cessation of the production of many of them. Supply disruptions along the global chains of goods, components, parts due to the consequences of the pandemic and lockdowns – a lack of vehicles, containers, even drivers. Shipping in containers from South-East Asia became 800% more expensive. But from this region mainly supplies come to us – cars and spare parts, electronics and household appliances, clothes and shoes, many food products. Relative reduction in the output of many agricultural products due to crop failure, drought, including in Russia.
Purely Russian realities are added to the listed global negative phenomena. Monopoly in the economy, limited competition, administrative diktat over business, an increase in the key rate of the Central Bank and a rise in the cost of loans – all this reduces the possibility of supplying goods to the market, contributes to a monopoly increase in prices.
On the other hand, there are also restrictions on price increases. They are associated primarily with the low effective demand of the population due to low incomes. The increase in interest rates on loans also hinders the attraction of borrowings for the purchase of goods. Therefore, it can be assumed that the most essential goods, which cannot be refused, will continue to rise in price at a faster pace. These are food products, including vegetables (due to poor harvest), medicines, household goods, household chemicals, everyday clothes, gasoline and tobacco. “