Marcel Salikhov, President of the Institute for Energy and Finance, commented on the inflationary processes in the Russian economy to the correspondent of the Expert magazine.
Non-monetary factors: supplies failed
“In my opinion, the money supply, at present is of less and less importance as a factor that influences inflation. In fact, the money supply is just a certain part of the monetary changes, - Marcel Salikhov said. - Any structural changes in saving behavior (for example, the growing popularity of investing in securities among individuals) will lead to a change in the dynamics of the money supply, but they are not associated with the inflation factor. Since the beginning of last year, there has been a steady decline in deposits that are part of the M2 aggregate, and this is the main reason for the slowdown in the dynamics of the money supply”.
Non-monetary factors are outside the influence of the Central Bank - they include everything, that is not related to the value of money: disruption of supplies, tariffs, the attractiveness of world markets due to rising prices, etc. And namely now these factors determine inflation.
It will slow down soon
A tangible slowdown in inflation will occur early next year - this is the consensus. According to Marcel Salikhov's forecast, the inflation peak will be passed in the first quarter and will amount to 7.3‒7.6%. The peak of the key rate will also be passed at the beginning of next year at the level of 7.25‒7.50%.
Indeed, far from optimistic things are happening to GDP: let us recall that during the second quarter the economy stagnated, and in July and August it showed a pronounced decline, even with the elimination of seasonality.
It is difficult to say, how great is the "fault" of the Central Bank, with its rate increase. “I don’t think that the increase in the key rate was the factor behind the slowdown in the economy in recent months,” says Marcel Salikhov. - First, by the third quarter, the Russian economy has practically reached its pre-pandemic level. Therefore, the slowdown in growth was quite expected. Secondly, the change in the interest rate affects the economy with a significant lag. Accordingly, a more aggressive rate hike by the Central Bank will have an impact on the economy in six to nine months. In addition, the Central Bank rate affects mainly indirectly, through the impact on credit and deposit rates in the economy. The growth in lending rates was significantly below the key rate, which means that the overwhelming economic activity pressure was lower."
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