Belousov: inflation in Russia may reach 12-13% by the end of 2022

Inflation in the Russian Federation by the end of 2022 may reach 12-13%, said First Deputy Prime Minister Andrey Belousov. He stated this at a meeting of the Presidium of the Government Commission on Improving the Stability of the Russian Economy under Sanctions. On the presidium Mr. Belousov also gave an assessment of the decline in consumption in Russia. According to him, in 2022 the decline will be 4.2%, in 2023 consumption will grow by 2.5-3%. The recession of the Russian economy in 2022 may not exceed 3%, the First Deputy Prime Minister noted.

“In general, for the year we expect the inflation rate to be approximately in the range of 12–13%, taking into account the current trends, which, of course, is much more positive and much more optimistic than we expected two or three months ago,” Andrey Belousov said. .

He noted that some recovery in domestic demand is recorded in the country: if in July the growth of loans to non-financial organizations was slightly more than 1%, and before that it was practically zero, then in August this figure doubled to 2.3%. There is also a gradual recovery in consumer demand.

The decline in the Russian economy in 2022 may be just over 2%, Andrey Belousov continued. According to him, the overall picture in the economy is now “better than previously imagined.” Investments in Russia in the second quarter may not show a decline, said the First Deputy Prime Minister.

He also mentioned a problematic moment with energy exports, which fell under EU sanctions. “The peak of these restrictions falls in the fall, and therefore we must carefully look at how the situation will develop,” Mr. Belousov explained. In the field of non-commodity non-energy exports, the authorities expect a decrease in volume by about 17% by the end of 2022.

Imports in Russia are currently 65-70% of the previous year’s level, while critical imports have decreased by 11-12%, the First Deputy Prime Minister added.

Forecast of the Ministry of Economy suggests price growth at the level of 17.5% in 2022. According to the forecast of the Central Bank, by the end of 2022, inflation should be in the range of 18–23%, and GDP should decline by 8–10%.

As of mid-August, goods in Russia cheaper third month in a row. Rosstat again recorded a weekly deflation of 0.13%. The government called the price cut a risk to consumer demand, which is falling by almost 10% per quarter.

Read more in the publication “Kommersant” “Inflationary expectations have grown along with tariffs”.

Maria Fedotova