Training on banks and NBCOs, January 24–25

Low inflation in Russia to force the government and businesses to seek new forms of flexibility

Russia 2021 economic outlook update

The forecast has been prepared in accordance with the General Principles of Socioeconomic Indicators Forecasting of ACRA.

  • Barring force majeure events, inflation will remain at around 4% (with deviation of less than 1%) until 2021. Due to the structure of the contemporary Russian economy, however, shocks boosting inflation are very likely to remain (changes in economic environment, natural disasters, higher taxes and rates). Reaching inflation targets in 2017 was attributable to not only tight monetary policy, but also to favorable environment.
  • Consistently low inflation to reduce potential for Russian companies in employing their traditional cost management approach. By fixing prices in their supply contracts and freezing wage rates, large businesses managed to save 0.1%-0.2% of their unit costs per 1% of inflation. Industries where prices are more inflation-dependent overall (e.g. infrastructure monopolies and service industry) are more sensitive to the low inflation mode. In…

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phone: +7 (495) 139 04 80, доб. 164, email: maksim.ivakaev@acra-ratings.ru

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