Inflationary expectations have risen along with tariffs

In August, the population’s estimate of the inflation rate expected in a year rose to 12% from 10.8% in July. This conclusion was made by the Central Bank on the basis of the data of the polls of the infom. In the group of respondents without savings, the indicator rose to 14.3%. In the group with savings, it fell again (for the fifth month in a row) and amounted to 9.8%. Population-observed inflation fell from 22.2% to 20.5%, with Rosstat inflation slowing to 15.1% in July and 14.3% by August 22 (see chart). Business price expectations also declined, but retail, the most important for the consumer price index, showed much weaker (0.3 percentage points, pp) than the economy on average (1.5 pp). Against this background, consumer sentiment rose to a maximum since May 2018.

“Judging by the qualitative responses, the growth of expectations in August is associated mainly with the July increase in housing and communal services tariffs, since estimates for most marker goods have not changed much. Indirectly, this is also evidenced by the decrease in observed inflation, – comments Dmitry Polevoy from Lokoinvest. – We consider the growth of inflation expectations as temporary, in September their decline may resume. Consumer optimism is more a reflection of a slower downturn in the economy and the stability of the labor market, rather than a signal for an increase in demand.”

Analysts of the Solid Numbers Telegram channel note that inflation, which is included in the OFZ curve, remains above 5%, despite the gradual decline in estimates from March highs. “The numbers indicate that pro-inflationary risks remain in the economy. The trend in June was the flow of funds from time deposits to current accounts, that is, the sensitivity of the level of consumption to changes in inflation expectations, other things being equal, should increase,” they believe.

In turn, the economists of the MMI Telegram channel pay attention to inflation expectations, smoothed for the quarter. They note that the decline that has been observed since April has stopped, there has even been a slight upward reversal, and the current level of expectations is almost one and a half times higher than the “normal” level that was observed in the pre-crisis years. Analysts agree that the easing of monetary policy by the Central Bank in September will be insignificant or it will not happen at all.

Alexey Shapovalov