Saving under-spent // Indicators of inflation observed by the population in September decreased

Inflation and inflationary expectations of the population observed in the surveys in September 2021 began to decline for the first time since the beginning of the year. Contrary to the assumptions, the September social payments to the population did not have a noticeable effect on expectations, but the increase by the Bank of Russia in the key rate and the resulting increase in the profitability of deposits return households’ interest in savings. It is not known how reliable the design will turn out to be: consumer confidence is growing at the same time, the full set of effects of overcoming the “covid” crisis is still impossible to predict.

The Bank of Russia published data from the September INFOM survey on inflation and inflation expectations, which finally confidently reflected the key rate hikes undertaken by the Central Bank. For the first time since February 2021, inflation “observed” by the population decreased by 0.9 percentage points (pp) in August (median estimate – 15.6%). At the same time, the views of the population with savings and without savings were unidirectional: in both groups, direct estimates of inflation (recall that they are complexly dependent on the Rosstat consumer price index, measured on the same scale – year to year, in In this case, the prices of September 2021 to the prices of September 2020) decreased to the level of May-June 2021.

Inflation expectations for the next 12 months, according to the same estimates, at least did not grow (a decrease of 0.2 p.p. versus August indicators), and in the group with savings the decrease was less pronounced (minus 0.1 p.p.) than in the group without savings (minus 0.6 pp).

It can be assumed that discussions about the extent to which “pre-election” payments to pensioners and military personnel are able to increase inflation, in September mostly had an audience of people with higher income indicators, among whom the share of savings is higher, while in households without savings there is a greater “natural” factors were important, primarily seasonal (with the seasonality significantly shifted to autumn in 2021) cheaper food. In any case, the payments turned out to be an insignificant episode in the inflationary history of this year. As the analysts of the Central Bank note, “the value of the balance of answers to the question of the qualitative change in future inflation for a month in advance decreased in September, and slightly increased for a year ahead”.

The growth of deposit rates in the banking system, caused by the key rate hikes undertaken by the Central Bank, increased both the propensity (both declarative and actual – see Kommersant, September 18) of households to save behavior. “The share of those surveyed who believe that it is better to save free money now increased to 53% (+2 pp against August). However, it is still less than before the pandemic: in January-March 2020, it was 55–56%, ”the Bank of Russia states.

Meanwhile, the consumer sentiment index continued to grow in September, having increased by 4.2 pp against August, mainly due to improved expectations. Recall that this part of the survey is designed to investigate the willingness of the population to spend rather than save, and the Central Bank considers a significant excess of effective demand over supply due to the faster than expected “post-like” economic recovery to be the basic mechanism of the inflation surge observed in 2021. It is not known which of the trends will prevail: it is obvious that in the current situation, any confirmation of the risks of the “fourth wave” of the coronavirus pandemic in the Russian Federation in the fall-winter of this year will cool demand and increase savings trends, any evidence of a better-than-expected state of affairs in the economy is to act on the contrary, and presumably the rate of spread of “good news”, based on the practice of 2021, is significantly lower than that of conventionally “bad news”. In other words, a later increase in the incidence of COVID-19 both in the Russian Federation and abroad will reduce the rate of “cooling” of inflationary expectations, fixing them around September indicators: the indicator in the Russian Federation has repeatedly demonstrated high inertia, therefore the October data will almost inevitably continue the wave of », The only question is the speed of its spread.

However, the reaction of the economy to the first three “coronavirus waves” (they exist rather in the information space than in the descriptions of epidemiologists, which are more complex) were different, to exclude that the “fourth wave” will be the same as the “second wave” pro-inflationary influence is impossible – although in theory it is rather anti-inflationary. The inertia of the reaction of the savings behavior of households to what is happening (both to the Central Bank and deposit rates and to the expected fluctuations in demand) is higher: a survey of the Central Bank of analysts still confirms the “anchorage” of their expectations, they predict that inflation will return to 4% as a result of the actions of the Bank of Russia in 2022, while the imputed inflation for two-year OFZs is not fundamentally higher than both these expectations and similar indicators in 2019.

Dmitry Butrin

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