Home Economy Reshetnikov: the Russian economy is slipping into a deflationary spiral

Reshetnikov: the Russian economy is slipping into a deflationary spiral

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Economics Minister Maxim Reshetnikov said that deflation has been going on in Russia for the fifth week in a row. According to him, the country is slipping into a deflationary spiral. Let’s take monthly data, May inflation recalculated into annual rates: 1.6 inflation rate… We are really sliding into a deflationary spiral, we need to take this seriously,” Mr. Reshetnikov said at a Sberbank business breakfast as part of the St. Petersburg International Economic forum (SPIEF; quotation from TASS). Therefore, the Ministry of Economy expects that they will continue to analyze the situation together with the Central Bank. “And as soon as possible, because without a cheap loan, we really can’t pull out the situation right now,” the minister said. In May, Maxim Reshetnikov said that deflation and the “overstrengthening of the ruble” created the risk of falling into a deflationary spiral, when the reduction of money in the economy leads to a reduction in production and lower prices. According to Rosstat, Russia is the third … .

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