According to the Russian Statistics Service, the inflation rate in Russia reached almost 12% (11.94%) in 2022. It is not a rare phenomenon for Russia, claims private investor and founder of Practical Investment School Fyodor Sidorov.
In the past years, lower inflation was recorded in 2009–2014 (6.1%‒11.36%). In 2015, the inflation rate was 12.91% and subsequently went down to 2.5% in 2017, 4.3% in 2018, 3% in 2019, 4.9% in 2020 and 8.39% in 2021. A higher inflation rate was recorded in 2000–2003 when it reached 15–20%. Between 1990 and 2000, Russia experienced hyperinflation, with prices growing 20% to 800%. In 1992, Russia saw a record inflation of 2,508%, after which a monetary reform was launched, the expert explains.
“So, it is unlikely that the current price hike as of late 2022 is something critical although, of course, Russians can see how seriously inflation affects their income. It is most likely that further down the line, inflation will start to decline as consumer priorities will not change: people will continue to spend cautiously and cut their expenses. That will affect the inflation rate, causing it to go down, Fyodor Sidorov believes.
The investor clarifies that inflation grows when people spend actively and right now, there are now reasons for that to happen as people prefer to postpone many purchases. In these conditions, the retail markets will try to maintain stable prices or increase them only slightly.
“By the year-end, inflation may go down to 8–9% as there are still objective reasons for prices to rise, including housing and utility rates growing, annual increase in excise duties and the growing tax burden on sectors generating major budget revenues (oil and gas, oil refining),” the expert predicts.