By Swann Collins, investor, writer and consultant in international affairs – Eurasia Business News, March 30, 2022

In the background, view on Moscow City, the business district of the Russian capital, from a central avenue. On the left, the Mall of the Kyiv railway station, in the center of Moscow, where Muscovites usually go shopping amid Russian and Western brands. October 2017. Photo credit : Swann Collins.

For the week from March 19 to March 25, the Russian consumer price index increased by 1.16%, reported Rosstat, the Russian statistics agency. From March 1st until March 25, inflation reached 6.6%. From January 1st, inflation hit 8.91%

Inflation in annual terms accelerated from 14.53% to 15.66%.

The information was prepared on the basis of weekly registration of consumer prices for 106 types of goods and services in 282 cities of Russia.

The highest price increase over the week cover many daily products:

  • Granulated sugar — 6.5%;
  • Table salt — 4,3%;
  • Chocolates – 3.5%;
  • Rice and black tea – 3.4%;
  • Buckwheat — 2.9%;
  • Fruit and vegetable products – 2.7% (onions – 18.3%, white cabbage – 15.9%, carrots – 11.5%, beets – 9.5%, potatoes – 4.1%) ;
  • Beef and sunflower oil – by 2.2% ;

Rosstat also recorded an increase in prices for hygiene items and essential goods. Pads prices went up by 6.2%, washing powders – by 5.3%, laundry soap – by 4.6%, baby diapers – by 4.2%, toilet soap – by 3.4%. Prices increased for a number of medicines: corvalol (4.1%), domestic analgin (3.0%), validol (2.8%), allochol (1.9%). Prices for foreign cars increased by 3.9%. The cost of gasoline has not changed, diesel fuel has fallen in price by 0.1%.

The growth of prices for non-food products slowed from 2.58% to 1.51% over the week. The Russian Ministry of Economy believes that this was due to the strengthening of the ruble. “A restraining effect on inflation was also exerted by deflation in the sector of tourist and regulated services (minus 0.48% after an increase of 1.02%) with the cheapening of foreign tourism services,” stated the Ministry of Economy.

Diesel fuel prices slightly decreased by 0.03% in the week from March 19-25 and even by 0.39% since February 2022. The main explanation is the US ban on Russian oil imports. Large amounts of Russian oil have lost customers in the West, driving down domestic oil prices.

Inflation expectations of Russians in March 2022 amounted to 18.3%, reported the Russian Central Bank. This is the second highest result in the entire history of observations and the highest figure since December 2010. Inflation in Russia in 2022 would be +20% and should decrease to +8% in 2023, according to the Macroeconomic Survey of the Bank of Russia. Surveyed analysts surveyed texpect that the national GDP could decrease by 8% by the end of 2022 because of Western sanctions. The Russian GDP would grow by 1% in 2023.

For the only week from February 26 to March 4, inflation in Russia accelerated by 2.2%, amounting to an annual inflation of +10%. This sharp increase over the week is the direct result of the strong Western economic sanctions imposed against Russia in response to the military operation in Ukraine. 

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© Copyright 2022 – Swann Collins, investor, writer and consultant in international affairs.