The present and the future – Newspaper Kommersant No. 6 (7451) dated 16.01.

Inflation data in late 2022 and early 2023 show that elevated inflationary pressures are fading rather quickly. The annual increase in the consumer price index, which amounted to 11.94%, did not worsen even the non-standard dynamics of services, and at the beginning of 2023 the traditional “review of price tags” is less active than in the past. Nevertheless, the results of the year in terms of consumer inflation are more than 15% increase in prices for goods and more than 10% for services.

Rosstat on Friday published detailed December and annual data on the dynamics of the consumer price index. December in terms of pricing is one of the most important months of the year, and the weakness of the surge in New Year’s consumption at the junction of 2022/2023 was recorded in the report.

Formally, the last month of last year gave a nominal price increase of 0.78% by November 2022 (0.82% a year ago). Last week, data on inflation in the first ten days of January were already published: this is an increase in CPI by 0.24% against 0.56% for the comparable period a year ago. Nevertheless, it is obvious that in fact the dynamics in January is even somewhat worse than in December: at the end of the year, the indicators masked an extra-hour (postponed by the government to November-December from the standard time) revision of utility prices. This also caused a non-standard surge in prices for services by more than 2% in December. Without these factors, New Year’s inflation is already quite low, without fruits and vegetables (an increase of 5.83% over the month – however, prices for these goods fell by almost 2% over the year), it would be almost zero, and without indexation of prices for services – negative: the core consumer price index for December 2022 even symbolically decreased by 0.03%. According to analysts at Raiffeisenbank, weekly inflation at the beginning of the year “even remained in a slightly negative area – 0.05% w/w”.

The annual results of the dynamics of price indices, however, are quite sensitive. A complex of circumstances and events initiated in March 2022 by the start of the Russian military operation in Ukraine led to an increase in food prices in 2022 compared to 2021 by 14.91%, for non-food products by 15.2%, for services – by 10.06%. These final figures de facto hide the value of the “inflation tax” in 2022, determined by the instability of the ruble in the first half of the year, the destruction of supply chains and the decrease in the price-stabilizing competitive pressure of imports and local production of international companies that left Russia—and inflation was reduced by the decline in domestic demand (partly caused not by a decrease in real incomes, but by an increase in savings) and import substitution in the consumer basket, to some extent accompanied by a simplification of the assortment and substitution of lower-quality goods for higher-quality ones. Among the most expensive groups of consumer goods in 2022 are household chemicals (an increase of 27.35% per year), electrical goods other than electronics (20.08%), building materials (13.9%). Inflation in the fuel market was practically absent in 2022 – gasoline prices increased by 4.46% over the year, which is even less than the increase in prices for clothes and shoes (7-8%).

Annual prices for services increased by 4–6% for most of their groups, with the exception of medical and health, household and transport services (10% price increase), insurance services (almost 21% increase in cost), and services for organizing foreign tourism, which rose in price. by 53.95% and thus returned to the status of prestigious and elite consumption. The dynamics of housing and communal services is similar to other services, with the exception of contributions for major repairs – they grew by 8.75% over the year compared to an increase in prices for utilities as a whole by 4.81%.

The short-term future of inflation formally cannot but be brilliant – the “base effect” of last year will inevitably reduce the CPI in the “year-on-year” dimension very quickly. However, in itself, the price pressure at the end of 2022 and at the beginning of 2023 is still quite high, according to analysts. The “Hard Numbers” Telegram channel, in particular, draws attention to the rate of growth in prices in non-regulated services in December (6.7% in seasonally adjusted terms), which, as expected, should be explained by the shortage (and, accordingly, the rise in price) of labor strength in a sector where labor costs represent a high proportion of costs. It should be noted that the prices of services grew in 2022 more slowly than the prices of goods. It is rational to assume that in the first half of 2023 they will continue to “catch up” with the inflation tax on the goods market.

Dmitry Butrin