Inflation in Russia is declining, prices are rising: economists have explained the paradox

The latest Rosstat data on February inflation in the country does not inspire optimism. Food prices continue to rise. If you focus only on monthly indicators, then these figures can be dismissed like an annoying fly. Just think, in February they added an average of 0.46%. But if you go shopping…

And if you go to the store, then you can not approach the vegetable collapse with our borscht set. For fruit and vegetable products, the rise in price amounted to an average of 6.69% in Russia. It’s only for a month! As always, vegetables are the locomotive for overclocking prices.

So, in February, onions rose in price by 34.2%, tomatoes by 15%, cucumbers by 7.7%, carrots by 6.8% … Fortunately, potatoes have been demonstrating enviable stability since the beginning of autumn last year (the red price is 25 rubles per kilogram) and cabbage, it is 19 rubles at all ..

By the end of February, chicken eggs were not pleased, which grew in price by 2.6% – but this always happens on the eve of Easter, when housewives make preparations for baking Easter cakes, this is already a seasonal rise in price, which does not depend on laying hens . Prices for live and chilled fish are growing noticeably – by 2% per month.

But there is also good news. Some cereals and wheat flour fell in price by 2.5-3.5%. Prices for chilled and frozen chickens, pork, vermicelli and black tea decreased within 1-1.3%.

From the statistical report, it is easy to see that in relation to a very difficult 2022, the inflation rate is declining. That should inspire certain hopes for our happy (in terms of rising prices) future. In January-February, the index was 2.17%, and for the first two months of this year – 1.3%.

It would seem a paradox: according to statistical reports, inflation is declining, while prices continue to creep up. In fact, there is no paradox here. Inflation is declining compared to last year. But successfully continues to grow this year. In any case, we pay in ascending order: what then (a year ago), what now.

And we pay, it should be noted, a lot if we compare the consumer price index with February 2022. In general, according to Rosstat, food products increased by almost 10%. Of these, bakery products by 11%, pasta by 8.3%, fish and seafood by 12.6%…

Most likely, the “fall” of inflation in March and April of this year, compared to the same period last year, will be even more significant. After all, then, because of the start of the special operation, the prices for products, services, and tariffs generally jumped up. And now the ruble is showing relative stability and such a rise is not expected. Inflation will again slow down in its growth, and prices will still go up – while maintaining (and even reducing) real incomes of the population.

What will rise in price next? Experts first of all name all the same vegetables. Domestic stocks of potatoes and carrots are depleted, we will see products from Egypt, Turkey and Azerbaijan on the shelves. And the “second bread”, the presentation of which even now seems doubtful, will cost not 25 rubles per kilogram, but, as analysts suggest, 40-45. The same can be said about other representatives of the vegetable series.

We asked Mikhail Belyaev, Candidate of Economic Sciences, financial analyst, to comment on the paradoxical situation with a decrease in consumer inflation and a simultaneous rise in prices.

“Inflation and rising prices are one and the same,” he says. For some reason, we believe that these are two different concepts, but this is not so. The growth of inflation is measured by the growth of retail prices.

– What is it called?

– Various reasons. An excess supply of money in circulation, a monopoly of trade or a producer. It can also be imported inflation, which is brought to us from abroad. Rising prices – to a certain extent, also the devaluation of the ruble against the dollar, euro and yuan. That speaks of a certain deceleration of our economy. Just a little bit, but all these reasons put together exert inflationary pressure on goods.

– What can we expect in the next 2-3 months in the consumer market? Further rise in price?

– I do not rule out that prices will rise. Since there is a massive import of imported vegetables ahead.. Trade will take advantage of this opportunity, they will start talking about complicated logistics, no one will check such statements. Importing countries will not lose their economic interest either.