To reduce inflation, a long-term tight monetary policy is needed – Kommersant
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In February 2024, consumer price growth remained at the January level and was significantly lower than the peak indicators of autumn 2023, according to the report of the Bank of Russia (.pdf). However, as the regulator notes, so far the slowdown in price growth is not happening at a sufficient pace. Sustained reductions in inflation require tight monetary conditions over a long period of time.
According to the Bank of Russia, in February 2024, consumer prices increased by 0.68% (in January – by 0.86%). Adjusted for seasonality in annual terms, the monthly price increase did not change and amounted to 6.3%. Annual inflation increased to 7.69% in February, against an increase of 7.44% in January. The regulator indicated that despite the slowdown in the current rate of price growth, they still remain higher than a year earlier.
To limit the pro-inflationary consequences of expanding domestic demand, a tight monetary policy is necessary, the Bank of Russia said in a commentary. According to the regulator’s forecast, taking into account the current monetary policy, by the end of 2024, annual inflation will drop to 4.0–4.5% and will remain close to 4% in the future.
On March 23, the Board of Directors of the Bank of Russia kept the rate at 16%. The Central Bank’s statement following the meeting noted that inflation pressure is gradually weakening, but remains high. The main pro-inflationary risk, according to the regulator, remains an increase in personnel shortages.
Read more in the Kommersant article. “Savings did not protect against consumption”.
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