Citizens are determined to accelerate price growth – Newspaper Kommersant No. 34 (7479) dated February 28, 2023

In a year, consumer inflation may reach 12.2%, follows from the expectations of the population, revealed by the poll conducted for the Central Bank “infom”. Over the month, this figure rose by 0.6 percentage points. The assessment of current inflation also slightly increased. Judging by the fact that the population began to lean in favor of saving cash, its savings are more likely a pent-up demand and can contribute to the acceleration of inflation.

Median inflation in a year, according to population surveys from the company “inFOM” (conducted February 1-10), rose to 12.2% from 11.6% in the previous month, the Bank of Russia said. “In February, the propensity of respondents to save continued to increase. The share of respondents who prefer to save free money rather than spend it on buying expensive goods increased to 55.9%, which is the highest since March 2021,” the Central Bank said.

This figure has been growing since October 2022, now it has reached its maximum since March 2021. At the same time, in February, the proportion of respondents who believe that it is better to keep savings in cash increased by 4 percentage points (pp) to 34%. This is back to December 2022 levels, when high pre-New Year payouts and cash savings are a harbinger of pent-up demand.

At the end of the year, the consumption rate, according to CMASF estimates, fell almost to the historical minimum level, while the savings rate in deposits, on the contrary, increased. “The reasons for this are not entirely clear – most likely, they are associated with the next phase of the population’s adaptation to the conditions of the crisis, when the “crisis consumption” (this stage was somewhat “blurred” this time), which supports the demand for consumer goods, is replaced by “crisis consumption”. savings,” the center’s analysts say.

It should be noted that citizens see the current inflation against the background of the devaluation of the ruble as extremely high – 15%, and consumer expectations, according to the Central Bank, rose again in February.

“The results of both January and February in terms of household spending will be quite good. According to our estimates, demand has returned to the pre-mobilization level (August 2022) and may even have gone a little higher,” analysts of the MMI Telegram channel say.

“The increase in consumer inflation expectations in February is hardly surprising, it is surprising how insignificant it is,” notes Alexander Isakov of Bloomberg Economics. “With the magnitude of the depreciation that has occurred since December, inflation expectations of 13-15% would look consistent with the experience of past years” . The reasons for this, according to the expert: either this is what “anchored expectations” look like (the experience of last year convinced the consumer that the exchange rate today can be anything, but the Bank of Russia will eventually do “everything is right” tomorrow), or this is a temporary deviation from the norm, and inflation expectations will continue to grow and reach 13-15% by April, where they should be approximately. “In any case, the key rate of 7.5% is starting to look low,” Mr. Isakov concludes. “Inflation risks remain high. This is the budget, and the course, and the overheated labor market, and new sanctions, ”analysts of the MMI Telegram channel agree.

The Bank of Russia has already noted the growth of inflationary risks associated with the deterioration of the terms of foreign trade, the state of the labor market and the acceleration of budget expenditures. The next meeting on the size of the key rate is scheduled for March 17. So far, the regulator believes that, taking into account the ongoing monetary policy, inflation will decrease to 5–7% in 2023 and return to 4% in 2024.

Artem Chugunov