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The ruble collapsed. What will happen to prices?

Рубль рухнул. Что будет с ценами?

The inflation shock from the beginning of the devaluation of the national currency will be even higher than one would expect.

Because of the situation on the currency market, the economic development Ministry does not rule out acceleration of inflation in March. How does this affect the prices in the stores and incomes?

The Director of the Institute of strategic analysis Igor Nikolaev:

Рубль рухнул. Что будет с ценами?

There are no miracles. The ruble is weakening. Although, as the experience of the day already shows that it will bounce at times, but the weakening will continue. Well, if so, the weakening of the ruble means inflation. This does not mean that inflation is now significantly skaknet, but I think the level at which we had left, at 3% per annum, is for this year, unreal. God forbid, if we stay within 10% inflation for the year.

Andrey Nechaev, the Minister of economy of Russia in 1992-93:

 

Accurate forecast I will not undertake to give — especially now that the Central Bank announces a different kind of measures to curb the fall of the ruble, and it inflation — a topic No. 1. Let’s see how the Central Bank will be successful in their efforts. But the fact that inflation will have a powerful additional impetus due to the devaluation of the ruble — it is absolutely obvious.

Imported goods will automatically become as expensive as they devalue the ruble. It is an axiom. While the share of imported goods, despite sanctions and so-called import substitution, it remains on the Russian consumer market is high. It is very different on different goods, including food: around 5%, and somewhere, and up to 50%. But the problem is in the fact that in the last year we have actively suppressed competition in the domestic market.

The natural reaction of a competitive market: if more expensive imported goods, they replace domestic. When you have no competition or full competition, then there is something else: the domestic manufacturers are beginning to pull their prices after prices of imported goods. The result of the inflationary shock from the beginning of the devaluation of the ruble is still higher than one would expect on the basis of the devaluation and the share of imports in the consumer market. We saw that in the course of the last massive devaluation in 2014-2015, and this time the situation has only worsened.

Now this is guesswork: we should understand what the ruble, the market will stop, and then you can do some calculations. But if the rate of devaluation will remain on the same indicators, as it is now, even on the basis of the official inflation rate (but it is significantly lower self-assessment of its people), it is still an additional impetus will be on 1-1,5% to inflation in recalculation for a year, or almost half. Now the leap might be a little more.

Director of the RAS Institute of Economics Ruslan Grinberg:

Рубль рухнул. Что будет с ценами?

Scientific forecasts differ from guesses that divination sometimes comes true. We actually live in a state of unprecedented uncertainty. And today and probably tomorrow — is particularly high. We can only guess what might happen. I think it was our unsuccessful attempt to save the markets and to hurt Americans. To fight the leader of the world economy is a risky business, and the probability of winning is very small.

If the national currency would not return in former position — somewhere in 63-63 rubles per dollar, of course, you can expect a very serious jump in inflation. And this is quite sad, since the real income and do not grow. Inclined to think that it seriously and permanently. If not for this epidemic of coronavirus would be the likelihood and quick rollback. But because of the imminent end of the epidemic is difficult to expect, it seems that the ruble will once again get a new slide, which will be another humiliation of the national currency.

Member of the expert group “European dialogue”, doctor of Economics Evgenie Gontmaher:

 

The most likely scenario, of course, inflation will rise. Compared to those 2% that we had last year, this year it will certainly be more. But not drastically. I don’t think it will be double-digit inflation.

Power is, of course, to do everything possible to suspend inflation. Are stuffing dollars, the money supply will hold (by reducing the real incomes of the population, or rather reset their growth). Last year was a small increase now is likely its zero.

To squander money to compensate for the falling real incomes will not. Perhaps some of pripevochki small will do, but nothing more.

Therefore, if again there is some emergency, inflation for the year will still be higher than last year. Will be officially announced somewhere in the 6-7% per year, and will be told: Yes, we received such a blow, but we coped, got off lightly, and then again a decline, we will embark on the road of stabilizing this whole situation.

The dollar will be at 70 rubles is it a new plateau. If the oil will cost around $35-40 per barrel, the dollar — 75-80 rubles. There will be a new stabilization. People naturally not say anything, though, and feel the decline in living standards. Disaster in the economy I do not expect, although it is unpleasant.

All of this — if not there will be a new “black swans”, and this is a very important reservation. The deliberate aggravation of relations with OPEC or the current amendments to the Constitution, we, too, like “black Swan.”

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