Inflation represents various forms of depreciation of money. It is characteristic of most countries of the modern world and is considered normal. Small inflation is an incentive for economic development, but only if it is expressed exclusively in a slight increase in prices. High monetary or any size hidden inflation is quite dangerous and extremely undesirable.
According to the Federal State Statistics Service, the inflation rate in Russia is now low.
The history of inflation in Russia
In Russia, the origin of the inflationary process dates back to the 50-60s of the 20th century. During the Soviet era, it was expressed mainly in the appearance of a commodity shortage. At the same time, product quality and prices were relatively stable, as they were regulated by the state.
A real surge in inflation was observed in the 90s. Its main manifestation during this period was a rapid increase in prices. At the same time, the availability and quality of goods changed to a lesser extent.
A feature of inflation in recent years has been the decline in the quality of food and some other types of products against the backdrop of moderate price increases (that is, hidden inflation prevailed). At the same time, the availability of goods suffered less.
The causes of inflation in Russia may be:
- monopolization of the economy and its various parts;
- various distortions in the economy;
- growth of the dollar against the ruble;
- high government spending, including military;
- growth of civil servants.
The dynamics of inflation in the past according to Rosstat
After the relative stability of prices during the USSR, a period of sharp growth began. Their takeoff began in 1991. This was due to an overly abrupt transition from a planned to a market economy, which made it virtually uncontrollable. In 1992, prices rose immediately by 2500 percent! Then the inflation rate began to gradually decline. In 1993, it amounted to 9.4 times, in 1994 - 3.2 times, in 1995 - 2.3 times. Moreover, the total price increase over the years has reached an almost astronomical value of 1.8 * 10 5, after which inflation has fallen sharply. In 1997, its level was only 11%. Such a drop was caused by measures taken by the government to combat hyperinflation.
A new rise in inflation (up to 84.4%) occurred in 1998. This event was due to the ongoing financial crisis. Then the price increase again declined. But even in the 2000s, it was several times higher than in developed countries. Basically, the inflation rate ranged from 8 to 13 percent per year. The upper figure refers to 2008, when the average cost of goods and services increased by 13.3%. This was due to the global economic crisis. Moreover, our country quite successfully overcame it, and the economy soon continued to grow.
Rosstat inflation data
To determine the magnitude of price increases using fairly complex methods. According to Rosstat, the inflation rate over the years shows an improvement in the situation in recent years. After a long period of moderate price increases, starting in 2015, this process has accelerated significantly. In 2015 and 2016, the figures were in the region of 10-15%. At the same time, food and medicine have risen in price to a greater extent than equipment and some types of services. Some services (for example, carpet cleaning) have even decreased in price. A negative factor was the fact that wages were practically not indexed, whereas, as before, this happened systematically.
The decline in inflation continued throughout 2016 and 2017. The minimum level was reached at the beginning of 2018 and amounted to just over 2%. This is twice as low as forecasted by the Ministry of Economic Development. By May 2018, inflation, in annual terms, increased slightly, approaching 2.5%.
Official inflation forecasts
It is estimated that before the end of the year, annual price increases may rise to 3-4%. The same level is forecasted in 2019. For Russia, this is a very low value.
As for food, according to the Ministry of Economic Development, the level of price increases may depend on the weather. Obviously, drought, if it affects the growth of plants, can lead to a relative shortage in the food segment and contribute to higher food prices.
Another important factor is the price of fuel raw materials. Now the situation on the energy market is relatively stable and favorable. The probability of unforeseen events for this year is very low. However, in the event of a sharp drop in oil prices, the dollar may rise, and the ruble, accordingly, depreciate. Then prices for imported goods will rise, and after them a new round of inflation, including hidden inflation, may develop. The recent drop in oil prices is a prime example. Moreover, the standard of living of the population is still quite low, despite the restoration of raw material prices.
