According to Russia’s Economic Development Minister, Maxim Reshetnikov, the inflation estimate for 2021 has been raised from 5.8 percent to 7.4 percent. According to Izvestia, experts believe that inflation is a worldwide issue rather than a local one, and that strengthening the currency may lead to slower price increases.
Food inflation is perhaps the most severe of all. According to the Economic Ministry, cabbage increased in price by 81.5 percent over a year, potatoes by 59.1 percent, carrots by 35 percent, and tomatoes by 31.3 percent.
According to Olga Belenkaya, Head of Macroeconomic Analysis at Finam, “in 2020-2021, governments and central bank authorities of the biggest economies took unparalleled measures to encourage economic demand, and demand, as lockdowns were removed, performed better than opportunities to adequately increase supply.”
The epidemic, on the other hand, has disturbed the regular functioning of production and supply networks, resulting in company production costs rising at record rates and businesses shifting them to selling prices,” she added.
Belenkaya anticipates “a modest reduction in yearly inflation to about 6.9 percent” by the end of 2021. Ekaterina Kosareva, senior partner of the analytical firm WMT Consult, also told the newspaper that she thinks the problem is a global decrease in economic demand.
“The epidemic has caused its own changes in economic growth projections and other macro indicators.” As a result, it is not unexpected that predictions are now being altered often, according to Kosareva.