”We do it as a preventive measure, to limit the risks, in particular in the short term. The future is uncertain, as well as the reactions to the vat, soon to be increased. The rise in the key interest rate to prevent inflation,” said the Russian central Bank today, after it raised its key interest rate for the second time in a year, by 25 basis points to 7,75%.
– the Next year, inflation will get worse, perhaps up to 7 per cent. The central bank’s decision is more than understandable, ” says Oleg Vjugin, who is a professor at the Higher economic school in Moscow, to the independent Vedomosti.
discussed is usually president Vladimir Putin to be careful to point out that inflation is low. The central bank expects inflation this year to remain at approximately 4 per cent. To keep inflation in check is important for consumers, since a large part of the Russian population still puts over half of their incomes on food.
Prices have yet been raised. According to the Russian statistical office Rosstat, increased the prices of groceries in Russia four times faster than in the EU during the first half of 2018.
Four years of international sanctions and steep fall in investment has been the Russian economy to shrink. It was only last year that GDP grew again, after having shrunk for two years in succession. But the lower oil prices and low growth – in the second half of the year GDP will grow by 1.9 per cent, means that the Russian government has been forced to take unpopular measures. That the vat increase is expected to worsen the situation for the entrepreneurs. Decided to raise the age of retirement is still extremely unpopular. It has been one of the few decisions Putin made, which has led to his poll immediately have plummeted.
the Growth next year is expected to be modest, between 1.2 and 1.7 per cent. At the same time, the EU agreed to sanctions against Russia continues. It was to be expected – everything else had been a very big surprise. Several EU countries, among them Poland and the baltic countries called for tighter sanctions after Russia seized three Ukrainian navy vessels in the kerch strait.
in today’s Russia that the sanctions are here to stay. Some sectors of the economy have benefited indirectly from them. The boycott of foodstuffs from the west, which the Kremlin introduced in 2014 as a response to the sanctions, has led to the agricultural sector grows. Ryskodlad tomato and cucumber are now cheaper than imported ones, after the major investments in greenhouses has begun to pay off, writes the independent business magazine RBK. During the last three years, the manner the greenhouse subsector doubled in the country. This year is the first time that the domestic tomato production exceeds imports.
at the same time, the Russian central Bank a strikingly cautious policy.
– the central Bank has already in the few years shown that they prefer to be cautious. They will always go in for conservative solutions when the situation is uncertain, ” says Kirill Tremasov, an analyst at Loko-Invest, to Vedomosti.