Page 18 - Russia OUTLOOK 2022

Food prices are the key factor driving up inflation. The Ministry of Agriculture reports that, because of climate conditions, the wholesale prices of potatoes and cabbage were up 70% year on year in 2021. While the headline rate appears fairly modest, the prices for staples like bread and sugar are up in double digits affecting the poorest the most who are experiencing inflation rates on the order of 30% or more.
Kirill Tremasov, head of the CBR’s monetary policy department, warned food prices may continue to rise in 2022 due to high prices for raw materials and fertiliser.
In the long run, economic forecasts predict inflation will slow and so will economic growth. An updated forecast from the Analytical Credit Rating Agency (ACRA) predicts inflation will approach the 4% target by December 2022, but economic growth will slow to 2% from 4% in 2021 in the meantime. Nabiullina says the key rate will return to its neutral level of 5-6% no earlier than mid-2023.
• CBR interest rates
Inflation remains the biggest challenge for the Russian economy in 2022
18 RUSSIA Russia OUTLOOK 2022 www.intellinews.com