The Russian economy in the second quarter of 2021 managed to reach the pre-pandemic level, according to analysts from the Central Bank of the Russian Federation. They also pause in the recovery in consumer demand in the coming months. In addition, experts are convinced that annual inflation in the country has not yet reached its peak.
The Department of Research and Forecasting of the Central Bank published the July bulletin “What the Trends Talk About” (.pdf). According to him, in May-June, the Russian economy continued to grow, including due to the growth in lending to legal entities and individuals. “The economy reached pre-coronavirus levels in the second quarter, and consumer and investment demand industries entered a pre-coronavirus growth trajectory. Russian exports support the recovery of the world economy and the rise in raw material prices, ”experts say.
Consumer demand growth slowed in May, the newsletter said. This was caused, in particular, by a decrease in the consumption of services, including against the background of the extended May holidays. “The June estimates indicate a possible pause in the recovery of consumer demand in the coming months, amid growing uncertainty around the epidemic situation. An important role in the further dynamics of consumption will continue to be played by inflationary expectations and the preservation, against this background, of the readiness to spend accumulated savings, ”the Central Bank said.
As noted in the document, the dynamics of consumer prices remains “significantly increased.” In June, annual inflation was 6.5%, a five-year high. “Probably, its peak value has not yet been reached, given the inertia of inflationary processes and a significant delay in their reaction to the process of normalizing monetary policy,” the bulletin says.
According to the Federal State Statistics Service, in June, of the products, the price for beets rose the most – by 58.4%, while the prices for carrots rose by 37%. Prices for the first half of 2021 increased by 5.79% compared to the same period in 2020. Economy Minister Maxim Reshetnikov predicted that prices for carrots and potatoes would drop in August, which would create a basis for deflation. The Prosecutor General’s Office of the Russian Federation revealed an unjustified rise in prices for socially significant products in several regions.
About the dynamics of food prices – in the article “Kommersant” “Food is more expensive.”