Vladimir Putin: it is necessary to return inflation to the level of 4%

Russian President Vladimir Putin during a meeting on economic issues called inflation the main problem of the economy and citizens. At the end of November, it amounted to 8.4%. “In 2022, it is necessary to ensure that inflation returns to the target level of 4%,” the HEAD of state said (quote from a transcript on the Kremlin’s website). He called for a "main focus" on increasing the supply of goods and services on the domestic market, primarily for food. In 2022, the production and supply of MEAT, SUGAR and vegetables should increase significantly, the President stressed.

At the end of November, Kirill Tremasov, DIRECTOR of the Central Bank’s monetary policy department, noted that the Central Bank sees the risk of a sharp increase in food prices again in 2022. He attributed this to a not very good harvest in the world and did not rule out that the situation could repeat itself next year due to higher prices for fertilizers. The Central Bank's inflation forecast for this year is 7.4-7.9%. The head of the Central Bank, Elvira Nabiullina, then called for reducing price increases as soon as possible, since this primarily affects the most vulnerable groups of the population.

During the meeting, Putin called for the growth of real disposable incomes of Russians at a rate not lower than the forecast level of 2.5%. The President noted that he was waiting for proposals that would allow reaching a sustainable real growth in wages and business income. He also stated the need to ensure sustainable long-term development of the economy and increase the potential growth rate of the economy.

According to a study by the Analytical Credit Rating Agency (ACRA), the normalization of world prices for energy products and food is possible in the spring or summer of 2022. The agency's analysts also believe that in the baseline scenario, the average annual inflation in RUSSIA will decrease to 5.5-6% next year, and the December indicator may reach 4-4.5% by December, approaching the target level.

Food prices in Russia and their change for the year, data for October 2021 

Director General of the Institute for Agricultural Market Studies Dmitry Rylko then said that if the next year was without serious weather disasters, and the new harvest was at a high level, then food prices would fall. “But it must be remembered that thanks to inflation, commodity prices have risen sharply, so much so that, I think, they will no longer return to our usual levels and will be significantly higher than the values ​​​​from which they started in the “bright” covid-19 future,” he said. In addition, the expert expressed doubts that next year inflation would be at the level of 4-4.5%.