Nabiullina warned of increased inflationary expectations in Russia – Росбалт.RU

Inflation in Russia last year has seriously slowed down, but increased inflation expectations persist.

“Inflation has seriously declined in the last year and now we see that it behaves as we predicted. We believe that we will achieve an inflation rate of 4% by year-end. But inflation risks remain, and chief among them is the still elevated inflation expectations,” — said in an interview with TASS the Chairman of the Bank of Russia Elvira Nabiullina.

According to the January survey of “old” (Institute of Fund “Public opinion”) commissioned by the CBR, the inflation expectations of the Russians in January 2017 continued to decline, while the median expected population inflation for the next 12 months decreased by 0.9 percentage points to 11.5% — the lowest level since July 2014.

the share of respondents who believe in achieving the target level of the Bank of Russia of 4% in January, increased (by 5 percentage points to 23%) and reached a maximum value in the entire history of observations. Furthermore, the proportion considering that in 2017, inflation will be significantly above the target level decreased by 7 percentage points to 57%.

According to Rosstat, consumer prices in Russia from 31 January to 6 February 2017 rose 0.1% as three weeks earlier, from the beginning of the current month — 0.1% YTD 0.7%.

Previously, the Agency reported that, in General, over the past year, consumer prices in the country rose by 5.4% (December-2016 December-2015). Thus, the country has completed in 2016 with a minimum level of inflation in the history of modern Russia.

For comparison, at the end of 2015, consumer prices rose in Russia by 12.9% in 2014, inflation was 11.4 per cent in 2013 and 6.5% in 2012 and 6.6% in 2011 and 6.1% (the rate in 2011 was to record the minimum value).

Nabiullina also noted that the Bank of Russia are very conservative in their forecasts because of the risk of new “black swans.” “The increased level of uncertainty in the world economy and world politics has been observed in the last 2-3 years. There are risks of appearance of new black swans, uncertainty factors generally will affect financial markets. Overall, therefore, a very conservative approach to our forecasts,” — said the head of the regulator.

According to her, the Central Bank tries to avoid excessive optimism, as in the case of a favorable development of the situation from the point of view of growth of the world economy, trade and oil prices, the Bank of Russia will always be able to adjust their policies.

the Concept of “black Swan”, first introduced by American economist Nassim Taleb, involves hardly predictable and rare events with significant consequences.