September 25, 2014, 16:07 |
The Central Bank Russia develop shock scenario of the economy, and inflation for the year, the government forecasts for more than 7%. Offering a move to inflation targeting, the Central Bank insists on economic measures.
Prime Minister Dmitry Medvedev at a meeting of the government dedicated to a single state monetary policy in the years 2015-2017, predicted inflation rate for the year by more than 7 %. “Inflation – is an issue that really excites most people, even in statistics. This year it may be more than 7%, which is higher than planned,” – declared prime.
The inflation forecast was refined during the year several times. Ministry of Economic Development is always correct it before the Central Bank, which was forced to agree later. If the spring, when the mayor raised the forecast of 5% to 6%, the management of the Central Bank has stated that it will not edit the target value, in early September, the first deputy chairman of the bank Ksenia Yudaeva reported that a new forecast will not seriously disagree with the estimates of the Ministry, which has grown to 7-7.5%.
“This year, the political and economic circumstances have changed significantly. Increased capital outflows. In this context, it is important to ensure that by the instruments of monetary policy of low inflation, low as possible in our conditions Of course, “- said Medvedev. Central Bank, he said, offers tend to increase prices by 4% since 2016, that is, in this and next year the government should take some drastic measures.
Meanwhile, the Central Bank, in addition to traditional baseline and alternative scenarios, “further worked”, according to Ms Nabiullina, the fourth – “stress”. The base is based on the lifting of sanctions, smooth decrease in oil prices, reduction of geopolitical risks and unraised taxes. Then inflation will decline, and GDP growth to rise to 2.3% in 2017. “Alternative” scenarios envisage the continuation of sanctions, slightly more rapid fall in oil prices and the increase in the tax burden, which will lead to increased private capital outflows, recognize in the CBA, which is ready in this case, “the use of additional tools, including non-standard”. In these cases, if briefly, the economy will still be recovering, but very slowly, growth can not be higher than 0.5% for three years.
But the “stress” scenario is based on a collapse in prices oil. That this case came up in the CBA is not yet known, this scenario, said Elvira, yet only worked.
The Central Bank offers in 2015 to move to inflation targeting. It “not only is the number one problem for the population, but also becoming more and more acute problem,” – said Elvira, has predicted that by the end of the year it may be even higher than 7.5%. Targeting, in which the Central Bank insists a long time, due to the introduction of the floating exchange rate. In other words, the Central Bank will not engage the support of the ruble currency intervention, though Nabiullina and reservation, that “for the purpose of ensuring financial stability,” the bank will conduct operations in the foreign exchange market.
Realizing that alone monetary measures economic growth can not be achieved, the head of the Central Bank insists on economic measures aimed at improving the productivity and sustainability of investment projects. If commercial banks will receive funds from the Central Bank at a lower rate, she said, “is unlikely because of this they will give loans to companies with a high debt load, with unclear prospects of sales”.
This is the main risks government. Inflation targeting can be successful in the independence of the Central Bank and non-interference of the authorities in monetary policy. Otherwise it is easy to lose control of inflation. In the context of ambiguous projections of the Russian economy (up to a dramatic collapse in oil prices, which is allowed) it could happen that the Kremlin and the White House will insist on the priority of fiscal policy that would nullify the efforts of the Central Bank.
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