Inflation in 2022 is likely to be the highest in twenty years

RUSSIA ECONOMICS - In Brief 23 Mar 2022 by Alexander Kudrin
Rosstat reported that in the seven days ending on March 18, inflation reached 1.93%, therefore bringing the MTD and YTD tallies to 5.38% and 7.67%. Prices continue to rise fast across the board, and there are no signs yet that inflation w-o-w can decelerate materially any time soon. Inflation m-o-m could get close to 10% this month, and by year-end, it could climb to over 15% and even 20%. Russia’s “special military operation” has lasted for too long and has the clear smell of something bigger than an “operation”, as the inflation statistics illustrate. The last time inflation was around 20% was twenty years ago, in the aftermath of the 1999 economic recession. The longer the “operation” lasts, the higher inflation will be this year. Respectively, the deeper the contraction of the private consumption will be. At this stage, there are no signs that the “operation” can be accomplished soon. Hence no reasonably reliable inflation and GDP growth forecasts are available yet.Evgeny GavrilenkovAlexander Kudrin

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