The outgoing year does not please us with macroeconomic results. As the Ministry of Economic Development reported the day before in its review “On the current price situation”, inflation in annual terms as of November 29 accelerated to 8.38%. Why it is higher than in Europe, and how it will affect the Russians’ New Year’s table, we talked with the famous economist Igor Nikolaev.
According to Rosstat, over the past week, from 23 to 29 November, inflation was 0.46%, while a week earlier it was 0.2%. Everything and everyone is becoming more expensive. However, according to the Ministry of Economic Development, the acceleration of inflation, in particular, was influenced by the rise in prices for travel services – over the week they grew by as much as 1.37%. No joke, tourist trips to Turkey have grown by 55%, almost 1.6 times! And food prices continue to rise, but at a slower pace. Up to 0.24% from 23 to 29 November. And the growth rates for the non-food group of goods, so they completely slipped to 0.17%. Including due to the slowdown in the growth of gasoline prices to 0.14% against 0.24% a week earlier.
The Kremlin is also alarmed by this situation. According to Dmitry Peskov, it is constantly discussed at economic meetings. And the measures taken help to avoid sudden jumps.
– Inflation of 8.38% – when was this in Russia?
“There have been worse, if you remember the beginning of the 2000s – double-digit numbers,” says Doctor of Economics, Professor Igor Nikolaev. – What’s bad now? In 2017, inflation in Russia was 2.5%, which is a very good indicator, we have been moving towards it for decades, because in 1992, inflation went over 2500%. Reduced, reduced – and after 2017, the trend reversed, the situation turned in the other direction
– Maybe some kind of one-time burst, the stars in the sky did not come together so well?
– No, for the last 4 years in a row this tendency has been manifested more and more clearly, and this is alarming. We assume the 2022 budget on the assumption that inflation will be 4%. My question is: where is such a guarantee, how realistic is such a forecast? Indeed, by the end of this year, it may generally approach the 10% mark.
– But what are the reasons for the growth? Oil on world markets is not cheap, gas in Europe generally breaks records … Where do we get such rates?
– Of course, there are external factors in inflation. Prices in external markets are growing – for raw materials and food, as a result of the pandemic, supply chains are disrupted. All of this matters. Although in developed countries inflation is much lower than in Russia.
But there are also purely our internal factors, which we prefer not to talk about, hiding behind a convenient formulation. Say, what did you want? All over the world!
Now, as an argument, they cite a sharp rise in the price of tours to Turkey. You can always find a “good reason”, an excuse, but it is necessary to look for our internal reserves.
– And what are they, our homegrown reasons?
“Their cart and little cart. Take the ineffective regulation of tariffs by natural monopolies, Russian anti-sanctions, directive pricing – as an example, the story with the prices of sugar and sunflower oil a year ago. Everything in the compartment taken together is reflected in the rate of inflation.
Finally, there is a weak level of competition in our country. Its absence is a direct path to higher prices. And not at all because the manufacturer is some scoundrel who makes money at someone else’s expense. This is a natural desire of any manufacturer: if the opportunity arises, to reduce their own costs in the simplest and easiest way – by increasing the price. And this is not his headache.
The state must create conditions for competition. The manufacturer should know: if he unreasonably raises the cost of the product, they will stop buying it, they will find the same one, but cheaper.
– We are all about interest and about interest! Tell me, will the Russians manage to put together a festive table for the New Year?
– We will put together a festive table in any situation. Another thing – what will it be?
Read also: “To celebrate the New Year with dignity, the Russians got into loans”
.