Oreshkin announced a trend towards a “smooth increase” in inflation in Russia
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Inflation in Russia has a gradual upward trend, but it is necessary to respond to this not by raising the rate and tightening monetary policy, but by taking measures to meet demand in the economy with supply. This was stated by Assistant to the President of the Russian Federation Maxim Oreshkin on the sidelines of the St. Petersburg International Economic Forum (SPIEF).
“We have to look at the real situation. In fact, we now have inflation of 2.9% (annual as of June 13. – Vedomosti), while with a smoothly increasing trend. This trend needs to be closely monitored,” he said (quote according to TASS).
According to Oreshkin, the response to rising inflation should not be from the side of the Central Bank, but from the side of the government “in terms of providing demand in the economy with an appropriate supply.” He added that if this task is completed, the Bank of Russia will not have to resort to “aggressive actions” to curb inflation.
The Board of Directors of the Central Bank at a meeting on June 9 for the sixth time in a row since September 2022 left key rate at 7.5% per annum. But the regulator’s hawkish signal, as Vedomosti wrote, has become tougher: the Central Bank “allows” the rate increase at the next meetings.
According to the regulator’s forecast, in the second quarter inflation will be at the level of 3.6%, and by the end of the year it may reach 4.5-6.5%. In 2024, inflation will reach a plateau. According to Russian President Vladimir Putin, inflation in Russia by the end of 2023 will will be about 5%, which, according to him, is a normal level for the country’s economy.
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