Conquering inflation

 Weekly inflation in Russia accelerated to 0.6%
 Weekly inflation in Russia accelerated after a two-week delay from 17 to 24 February its rate rose to 0.6% from 0.4% last week; since the beginning of the year to February 24, prices grew by 5.8%.
 "During the period from 17 to 24 February 2015 the consumer price index, according to the Federal State Statistics Service, was 100.6% since the beginning of February - 101.9% since the beginning of the year - 105.8%," - said on Thursday Rosstat.
At the same time, inflation in the BRICS countries in 2014 was lower than in Russia.
Last year, the increase in consumer prices in Russia as a whole in February was 0.7%, since the beginning of the year - 1.3%. Thus, the annual inflation rate, as of February 24 reached 16.2%, still higher than the key rate of the Central Bank (15%).

For the week of 17 to 24 February, tea became expensive by 2.1%, frozen fish - by 2%, rice - by 1.7%, canned meat, sunflower oil, pasta, candy - by 1.3-1.4% . At the same time the chickens fell by 0.2%, eggs, sugar, buckwheat, vodka - by 0.1%.
Increase in fruit and vegetable prices by an average of 0.1%, including onion - 1.7%, carrots - 1.4%, apples - 0.8%, cabbage and potatoes - 0.6%. In this case, tomatoes and cucumbers have become cheaper by 6.1% and 0.4%, respectively. Prices for gasoline and diesel fuel decreased by 0.1%.
Ministry of Economic Development forecast inflation in Russia for the current year is 12.2%, which coincides with the estimates of the Central Bank. In this case, in its updated forecast of the ministry comes from the fact that the peak of the annual inflation rate in the 17-17.5% have at the end of the first - the second quarter. Earlier, the ministry predicted that the peak of inflation will be in the first quarter. Inflation in Russia in the past year, much higher than the official forecast, amounting to 11.4%.Source: 1prime.ru

  Topical ArchiveInvincible and uncontrolled inflation
 "I think that every employee of the Central Bank understands that maintaining low inflation is absolutely necessary for a successful economy, and we will do everything to ensure this," - Federal Reserve Chairman Ben Bernanke.
After the price increase in January and February overcome the bar at 4.1%, Alexei Kudrin admitted that to keep inflation within the budgetary framework fails."Today - says Elena Lashkina in" Rossiyskaya Gazeta "- Cabinet to hold an urgent attempt to find an answer to the question, exciting almost every Russian: why prices are rising in the country? Runaway inflation a few months of this year has managed to spoil not only positive picture economic development of the country, but, judging by the strong commitment of Prime Minister Mikhail Fradkov, career some officials of his office. "Here are some important steps to (Prime Minister faces dismissal individual officials) can bring this uncontrollable and unstoppable inflation. And at a recent meeting of the government it was only about the fight against inflation and how on this front has distinguished each member of the cabinet. On the need for a more serious struggle with rising prices for consumer goods last week said Vladimir Putin - he pointed out that the government is unable to cope with the performance developed by the same measures to contain inflation. Each year we learn about the grand plans of the government to reduce inflation, which it has set itself. But at the end of the year, we again find that within the scope of and failed to squeeze in spite of the obedient Statistics. Apparently, will be no exception and the current year.You can certainly do so, as advised satirist Viktor Koklyushki: "In our calculations we have always (since 1917) are wrong ... And personally Fradkov I would advise not to worry because he and so the kind of person forgotten keys and standing in front of a closed door. He is useful to work out. And if the president we skier, the prime minister came to international drafts. In conclusion, I suggest to consider the word "inflation" indecent and in his speech no longer use. "That's just, unfortunately, withdrawal from the vocabulary word "inflation" does not eliminate the inflation itself. Therefore, even that time I try to draw the attention of visitors to the discussion that took place around the inflation rate, and maybe someone tired, but what is written about inflation Shishkunova Elena in the newspaper "Izvestia", should be noted. "Inflation - Shishkunova tells us - this year will exceed the planned level. Prices in Russia are growing because people do not believe in the stability and big spenders."Here is why our prices are rising and the ruble depreciated. We naively thought that this is the result of government policy and the Ministry of Finance, which they carried out in the interests of certain business communities and bureaucracy. As you can see, today, due to the lack of scientific concepts of political economy, dominated by such things as: a lot, trust, and so on. D.Even more incredible understanding of economic laws shows readers "Newspapers" Nicholas Vardul: "The government is going to reveal the miracle to raise economic growth, lower inflation and implement national projects. The miracle is that to solve these problems at the same time, even theoretically impossible." As you can see, Nicholas Vardul is also an expert knowledge of economic theories.He was echoed by Maxim Sokolov in the newspaper "Izvestia": "Justice, however, requires the recognition that the latter approach Mikhail Fradkov was not the best. Hand after the President to demand from Alexei Kudrin and Gref check digit inflation - and no longer ppm, Prime came into conflict with their own wishes about the same in order to pick up the pace of economic growth, reduce the tax burden. And also to implement extensive national projects. If charging AL Kudrin only thing he knows, ie the fight against inflation through the full pumping money out of the economy, then what does the national projects, growth and tax cuts? "Nicholas Vardul and Maxim Sokolov "firmly" learned, probably due to a "good" teachers that economic growth is possible only in conditions of inflation and confidently flaunt it. But if they are a little to reflect on how the inflation of the direct producer, it could very well see that inflation does not only contribute to economic growth in Russia, but also inhibits it.Inflation processes developed under the pressure of two factors - it is not related to walking in non-production sphere, cash infusion from the government, and rising commodity prices of so-called natural monopolies. In this and in another case involved the official. In the first case it is the government, the Ministry of Finance and the Central Bank employees, while in the latter, officials of various levels of government involved in the Tariff Commission, and make decisions about raising of certain tariffs. From this it follows that the development of inflation is beneficial to the state and the owners of monopolies. After all, who spurred these processes, that they are beneficial.This phenomenon can not be counted among the actions that increase the competitiveness of our economy, as all manufacturers grow production costs, and the lion's share of the profits into the pockets of the monopolists. On this occasion, not even worth spreading.We now turn to the state and see what gets the state of depreciation? Firstly, we must not forget that the state is involved in the existing monopolies and therefore the officials involved in the division of profits of these monopolies. Second, as a result of depreciation of the state, a so-called boost inflation, which officials can dispose of at their discretion, including spend it to strengthen their power. Budget surplus is presented by them as an achievement, as a result of strong economic performance, without understanding, and thereby there is currently too much money. Through the development of production, due to the growth in labor productivity, or by bleeding our economy. Inflationary boost is derived from the fact that the budget approved by the payment of an article-in the form of a flat fee, and taxes collected as a percentage of profit and turnover, and because of the time lag between the moment and throw the money until the price equalization.To put this in a tangible product, population, due to a decrease in purchasing power of pensions, allowances, stipends, salaries will be able to purchase only part of the goods that it consumes up to this, the other part was taken over by the state, and it can spend it as desired.In addition to the official, in the field of economic relations, we have representatives of big business, which specializes in trading of raw materials in international markets or products of primary processing, business oriented to the domestic market, small and medium business and hired workers. Of these we have the agents of production, benefit from inflation receive state and big business, are traded on world markets. Commodity monopolies benefit from depreciation of the ruble, as obtained for the same amount of products sold on the world market, more rubles, which they pay, within the country, with equipment suppliers and workers at the old prices. The main benefit of these companies arises from the constant gap between wages and inflation. A state will receive additional profits by cutting part of the excess profits of raw magnates. That's all, who benefits from inflation.So where is the economy arising from inflation, about which so much has been written. Inflation, which would produce the oligarchs and officials of excessive profits, does not contribute to the economic development of our country, as well "baked" Kudrin, Gref, and their ilk.Now focus on how inflation affects those who was not involved in power, to the higher bureaucracy and commodities trading - to workers and employers. Is inflation the economy develops in this part?Not to mention the fact that inflation lowers the standard of living of the majority of the population, it is also detrimental effect on the development of the economy as a whole. As a result of the fall in real purchasing power of the population shrinking market for items of mass consumption, there is an illusion of overproduction of goods and services, which forces manufacturers to curtail or suspend production. And although the cost of hired labor and falls, the entrepreneur loses much more than winning, because he is not only important rate of return, but the mass. It is interesting to have a 5% from 1000, 10% of a hundred, because 50 rubles more than 10. The second, no less disastrous consequences of inflation - a rise in the cost of money, credits, which naturally inhibits the possibility of the development of small and medium-sized businesses, as it is not in any case, you can make a profit, making it possible to pay interest and inflation. Do not develop not only business loans, but not loans population, mortgages, as the salary is lagging behind inflation. Third, in terms of inflation unwinding businessmen refuse to invest in the long payback periods, which hinders the development of manufacturing equipment and productivity. Fourth, the steady decline in the cost of labor, that is, real wages in manufacturing, hinders technological development, which is the core competitiveness of any economy. Why the owner of the plant will introduce mechanization of the production or use of industrial robots, he can always find in the labor market, and cheap enough skilled workers?The policy of the government, which holds her in alliance with the oligarchs, aimed at unwinding of inflation and increasing income of oligarchs, leading the country to a standstill, the degradation and economic backwardness rather than to economic prosperity, as we try to instill various publicists.Fortunately, there are journalists and those who honestly expressed about inflation, as Eugene Gontmaher who openly wrote that inflation - is primarily a tax on the poor, and thus the victory over it should not happen in the economic sphere, and in political."Inflation - the worst social disease - writes Gontmaher. Because those 10.9 percent inflation rate, according to official statistics, last year for the poor of our fellow citizens have grown to much higher levels. According to our calculations, for them last year's inflation rate was at least 15 percent. First of all, because the poor acquire those products, which in the first place, and prices rise ... Inflation further increased the gulf that exists in Russia between rich and poor. But reducing this difference, reducing the number of people living below the poverty line, announced one of the priorities of the government's social policy. Therefore, it can be argued that the fight against inflation - is not so much an economic problem as political. "You can add only that this political problem can be solved only by the citizens themselves, not relying on the government. Given also the fact that big business never sleeps. Natural monopolies again demanded a raise. And trades natural monopolies, which began with officials about the increase in tariffs, can be successful. Yesterday the head of the Federal Tariff Service Novikov said that by June the ultimate level of tariffs in respect of "Gazprom", RAO "UES" and "Russian Railways" will be specified. This is not the first high-ranking official statement about the possibility of revision of tariffs. The other day, did not rule out the Deputy Minister of Economic Development and Trade Belousov.So all the talk about the fight against inflation is likely to remain so and talk.
Vitaly Glukhov
   16.03.2006, the