Inflation rate Russia

Inflation Rate Growing Because of Atypically Cold Weather

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In Russia, cold weather in spring and summer can cause the decrease of harvest, which may lead to the growth of consumer prices at the end of this year and even in the first half of 2018, according to new study by the Central Bank, published on July 12.

According to the Central Bank, in June inflation rate was 4.4% in annual terms (before that the inflation rate was expected to be 4%). The growth of inflation in the first summer month was affected by prices for fruits and vegetables, which increased by 8.3% compared to May and by 27.6% from the beginning of 2017. From April to June, price for potatoes went up by 91.9%, and price for staple vegetables except for cucumbers and tomatoes rose by 67.2%, according to the data of the Ministry of Economic Development.

Earlier it was said, that the rise in prices for fruits and vegetables was attributed to the delays of the early harvest because of atypically cold weather in spring and summer. According to meteorologists, May was one of the coldest in the history of the country. However, the Central Bank believes that the spring-summer inflation is temporary.

Beside the cold weather, the inflation rate was also affected by the weakening of the ruble, experts say.

The official authorities expect a slowdown in the growth of consumer prices, including fruits and vegetables. Maxim Oreshkin, head of the Ministry of Economic Development, predicts a decline in prices for vegetables in July-August, after the arrival of a new crop on the market. According to the minister, inflation in 2017 will be 3.8%.

www.russian.rt.com

 

Growth of Prices for Fruits and Vegetables Slowing Down

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According to the Ministry of Economic Development of the Russian Federation, the slowdown in the growth of prices for fruit and vegetable in Russia can be seen. Expects say that this trend will continue in the next months. According to the weekly data, the average daily price growth slowed to 0.18% in the first week of June from 0.25% in early May.

At the same time, overall inflation in May remained at the level of 4.1% in annual terms, which is slightly higher than the estimates made by the Ministry of Economic Development of Russia a month earlier. The main reason for this deviation was the dynamics of prices for fruit and vegetable products as the price increase accelerated from minus 3.1% in April to 2% in May, due to the atypically cold weather in April-May and a delay of the early harvest.

The prices for potatoes and other staple vegetables excluding cucumbers and tomatoes grew by 30.7% and 21.6%, respectively, due to the low stocks of production and low volumes of early harvest because of the cold spring.

The prices for greenhouse vegetable (cucumbers and tomatoes), on the contrary, decreased significantly – by 18%, (the previous month they grew by 1.6%). However, this could not fully compensate for rising prices for other vegetables.

www.fruit-inform.com

In 2016, Inflation Rate Reached its Minimum Rate for the Past 25 Years

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In 2016, the inflation rate was 5.4%, compared to 12.9% in 2015, according to Federal Service of State Statistics. This is the minimum rate for the past 25 years, according to IndexBox analysts: the previous record was in 2011, when the inflation reached 6.1%.

One of the main reasons of prices stabilization was strengthening of the ruble, connected to oil prices growth; in 2016, the average dollar exchange rate decreased by 17% to 60.6 rubles per dollar.

Another reason for the deceleration of the inflation rate was the tough monetary policy of the Central Bank: in 2016, the key rate was reduced only twice – in June and September (to 10%). This meant the growth of money market rates, which increased savings amount, slowed down credit activities and controlled prices growth.

Another reason was the decrease of domestic demand: for the first 11 months of 2016, the real income of the population declined by 5.8% and retail trade turnover – by 5.1% in annual terms.

In 2016, the inflation rate for food products was 4.6%, compared to 14% in 2015, for industrial goods – 6.5%, compared to 13.7% in 2015, and for paid services – 4.9%, compared to 10.2% in 2015.

As for the inflation rate forecast for 2017, despite the decline in inflation rate, it may not reach the forecast level of the Central Bank (4%), according to analysts. One of the reasons for that is the recovery of the domestic demand, which is very likely as real incomes got more stable. According to IndexBox, the inflation rate of 4% may be achieved if the embargo is lifted.

www.indexbox.ru

Fruit prices in Russia have increased almost by 60% for 2 years

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According to Rosstat prices for fruit in Russia have risen by 59.2 per cent since the boycott. Between July 2014 and March 2016, when the sanctions were imposed, fruit prices have risen by nearly 60 per cent. Prices for vegetables and frozen fish have also risen. The largest increase in prices was registered during the first months after the boycott was introduced. Prices have stabilised for now.

www.freshplaza.com

Russians now spending half of their income on food

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As real incomes continue to contract in Russia amid an ongoing economic slump, spending on foodstuffs is taking up a larger and larger part of the average citizen’s budget.

In February 2016, for the first time in eight years, food and alcohol, along with tobacco products, were the main part (50.1 percent) of Russia’s retail turnover.

The statistic was published in the monthly monitoring report of the population’s social-economic situation and wellbeing prepared by the Institute of Social Analysis and Forecasts at the Russian Presidential Academy of National Economy and Public Administration.

The previous “record” was set in May 2009, when the share of food products reached 49.6 percent of retail turnover.

“Currently there is growth in the population’s spending on food, which logically reflects the fact that real income has decreased and poverty has increased. It is known that the poorer the household, the higher the part of the budget that it spends on food,” say the report’s authors.

The institute calculated that in February 2016 Russians’ real income in comparison to the same period in 2015 had declined by 6.9 percent and real salaries had declined by 2.6 percent. The poverty level by the end of 2015 had increased by 2.2 percent to 13.4 percent.

According to the monitoring report, 50 percent of the population have experienced a decrease in living standards, which has consequently resulted in a reduction of consumer activity. Both low-income and medium-income classes have begun to economize.

By March 2016 the number of poor Russians who had begun economizing on goods and services had increased to 89 percent and the number of people from the middle class who were cutting back their spending had grown to 79.3 percent.

Of the Russians surveyed, 55.8 percent said that they were ready to cut out non-essential goods they were used to buying.

“Besides buying food, Russians must make monthly payments to cover their debts, mortgages and other financial commitments. In such cases the majority of Russians either stop buying cars, expensive electronics, furniture, etc., or don’t buy them at all,” said Natalya Kolupayeva, a senior analyst at Raiffeisen Bank.

According to the report by the Institute of Social Analysis and Forecasts, people are mostly pessimistic in their evaluation of the economic situation: “The light at the end of the tunnel is moving farther away.”

In the words of one of the report’s authors, Maria Ivanova, in the course of the year the share of Russians’ budgets occupied by food products may increase.

“The reasons will be the same: The continuing reduction of the population’s real income and consequently, priority consumption of essential goods,” she said.

www.rbth.com

Forecast for 2016 by Aleksei Ulyukaev, Economic Development Minister

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Alexei Ulyukaev, Economic Development Minister, told reporters that the inflation rate in Russia in January would be 0.9-1%, and in annual terms, it would be 10%.

According to the Russian Federal Statistics Service, inflation rate in Russia was 0.2% from January19 to January 25, 2016 . Since the beginning of the year, the rise in prices by 25 January was 0.7%. In annual terms, inflation fell by 25 January to 10,2-10,3% from 12.9% at the end of December 2015.

In the middle of January, Economic Development Ministry told “Interfax” that if the average price for oil was $40 per barrel, inflation rate would be about 8.5%.

The Central Bank in mid-December forecast that inflation rate in 2016 would be 5.5-5.6% if oil price was $50 per barrel, and inflation rate would be 7% if oil price was $35 per barrel.  The Ministry of Economic Development expects inflation to be 6.4% if oil price is $50 per barrel.

www.retailer.ru

Growth of food prices in Russia in 2015

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In 2015, in Russia food prices rose by 14.3%, according to the Russian Federal Statistics Service. At the same time, in the EU, food prices rose 0.3% in 2015. In December, in Russia they increased by 1.4% and in the European Union, on the contrary, they decreased by 0.2%.

In Russia, prices for fruit increased by 28.7%; for sweets (chocolate, honey, candy) – by 23%, for fish and seafood – by 22.9%, for meat – by 7.8%. In the EU, the most notable was the rise in prices for fruit and vegetables.

www.retailer.ru

Russian inflation rate was 12.9% in 2015

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Russian annual inflation for 2015 on consumer prices was set at 12.9 percent, according to Rosstat’s final statistics for the year.

According to earlier predictions by the Russian Economic Development Ministry, inflation was set at 12.5 percent. At the end of December, Economic Development Minister Alexei Ulyukayev said the inflation rate for 2015 would be approximately 13 percent.

Russia saw an economic downturn in 2014 after the United States and the European Union imposed economic sanctions on Moscow over its alleged involvement in the Ukrainian crisis. The ruble lost about half its value against the dollar.

In late November, the International Monetary Fund (IMF) said Russia’s economic outlook had been improving, with the country’s economy heading toward stabilization. The IMF predicted Russia’s inflation rate to continue to fall further during 2016.

Last month, Russian Finance Minister Anton Siluanov said that the inflation in the country would slow down to 6-7 percent in 2016.

www.sputniknews.com

Real wages and retail sales falling, while unemployment rate rising

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Retail sales fell 13.1% year over year, worse than the 11.5% market estimates. The decline likely means consumption declined in the fourth quarter.

“This will cause the recession to be extended for at least a sixth quarter,” says Daniel Hewitt, a Russia economist with Barclays Capital in London.

Real wages fell 9.0%, but that’s better than the 11% decline in October. Unemployment on the other hand rose to 5.8% from 5.5% in October, so within any margin of error.

Russian industrial is still negative, falling 3.5% on the year. Consensus estimates had it at -2.9%. The good news is that the negative numbers are not as high as they were a few months ago. They’ve been on the upswing for the past six months, but are still in the red.

www.forbes.com

Russian fruit prices increase further

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On average, fruit has become 30 to 50 percent more expensive in the past 12 months. The cause is a weak rouble and the boycott of Europe.

Оranges show the biggest price hike. In September, prices were 57.4 percent higher than a year before. Bananas, apples and pears became a third more expensive on average. Import has become a lot more expensive since the rouble lost 45 percent of its value. According to statistics, 90 percent of the consumed fruit in Russia is imported. Prices for food in general increased by about 17.4 percent on average.