Page 37 - RusRPTDec21

The outlook is not optimistic; the Central Bank of Russia (CBR) predicts food prices will continue to rise in early 2022 due to poor harvests and increased costs for animal husbandry.
In late October, several large meat processing companies raised prices by 7-20%, citing increased costs for raw materials as the cause. The Ministry of Agriculture has proposed eliminating the import duty on beef and pork (within a certain quota) in order to keep meat prices down. The duty on pork is currently 25%.
Russian inflation hit 8.1% in October, the highest it has been since February 2016. Rosstat reported that October inflation accelerated by 1.11% compared to 0.60% in September.
High inflation and stagnant growth have led to fears of “stagflation” in the Russian economy; inflation continues to rise even as GDP growth has declined year-on-year and new COVID restrictions further hinder economic recovery. Last month, the CBR aggressively raised the key rate by 75bps to 7.5%, and another hike is expected at the CBR’s December meeting.
The inflation expectations of the population remain extremely high but appear to have passed peak.
The FOM survey found that the media expectation for inflation in the next 12 months was 13.5% in November, slightly down from October, but still up from September’s 12.3%.
However, those with no savings – the social group most exposed to inflation, expect inflation of 15.1%, again down from 15.6% in October, but still well ahead of 13.4% in September.
37 RUSSIA Country Report December 2021 www.intellinews.com