Thursday, June 23, 2016

Central Bank has improved the inflation forecast for 2016 – RBC

Photo: Yekaterina Kuzmina / RBC

The Bank Russia has revised its forecast for inflation in 2016. According to experts of the Central Bank, by the end of this year, consumer prices for goods and services will grow in Russia by an average of 5-6%, rather than 6-7%

Bank of Russia announced the reduction of the inflation outlook for 2016 year. According to estimates of the Central Bank experts, the current year, consumer prices for goods and services will grow in Russia by an average of 5-6% instead of 6-7%, as previously thought. CB obyasnil change forecast stabilization of inflation. During May 2016, consumer prices rose by an average of 0.4% the same as in April. At the same time annual inflation for two months kept at a level of 7,3%

«Rising prices for most goods and services continued to slow down & lt;. … & Gt; This indicates the potential for further slowdown of annual inflation in the absence of unforeseen shocks, “- the document says the Central Bank

It also emphasizes the preservation of” certain proinflyatsionnyh risks associated with increased inflation expectations, a lack of fiscal consolidation strategy and uncertainty about. indexation of wages and pensions. »

in April 2016 the head of the Central Bank Elvira Nabiullina warned about the risk of getting stuck at the level of inflation in the 6-7%, which it described as” totally unacceptable “in terms of investment growth.

The document experts of the Central Bank published on Thursday also pointed to the increase in the annual rate of food inflation – in May 2016, it accelerated by 0.3 percentage points (from 5.3% in April to 5.6%), largely for account “for fruits and vegetables low baseline effect on the dynamics of prices.” “If the price of fruits and vegetables were lower in April than a year earlier, in May, their level has already matched last year (despite the fact that the rate of increase in the past month were small). Similar effects were also observed in the growth rate of prices of certain other foods (eggs, sugar), “- was slightly lower than in April (8 document says CB

The annual growth of non-food products in May 2016 prices. 4% vs. 8.5%), but still significantly higher than the growth in food prices. CB Experts attribute this situation to the active import substitution in the food industry, and offers a high level of agricultural production.

On the eve of Deputy Economic Development Minister Alexei Vedev he said that his agency forecast for inflation in 2016 will be reduced to 5.9%. “The greatest optimism we have is inflation. It decreases steadily and this year even, perhaps, our assessment at the level of 6% may be slightly lower – 5.9%. Over the past few years, the first time we see such a tendency, when food inflation decreased faster than overall inflation, “- said Vedev

The same day, the Center for Development experts of the Higher School of Economics (HSE) in its report warned. that the slowdown in prices has not helped to stop the decline in consumer demand from the population. According to the HSE, the retail turnover in May 2016 compared with April and excluding seasonality decreased by 1.1% (drop in performance has continued for 17 months in a row), and the other stronger sales of food products fell. During the HSE noted that such a situation testifies to the well-being of the deterioration of the poorest population.

According to the Federal State Statistics Service, the real incomes of Russians (that is, the money that remains on hand after all the mandatory payments, and can be spent on their own needs or postponed for the future) declined at an annual rate of 5.7% in May 2016. Compared with April, falling incomes slowed, but its rate still remain high. All the more so to compare their current level is necessary to Rosstat has strongly fallen the previous year. According to official figures, the continuous reduction of incomes of Russians continues for more than one and a half years in a row – the last time their annualized growth was registered in October, 2014.

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