Moscow. April 20. CBR sees risks that inflation may get stuck at non-investment of 6-7%.
“I must say that the Central Bank is also concerned about economic growth, our contribution to the return to sustainable growth – reducing and anchoring inflation at persistently low levels. Because low inflation will not be low long-term rates in the economy and predictability of business environment, critical for economic growth”, – said the head of the Central Bank Elvira Nabiullina, speaking at the expanded Board of the Ministry of Finance.
She noted that the latest inflation figures show a decline of the annual inflation rate almost doubled compared to the same period last year to 7.2%.
“This brings us to the goal by the end of 2017 to have an inflation rate of 4%. Yet, the fact that we are now entering the level, familiar to 2014, we should not allow ourselves to relax. And we should not lose vigilance because there is a risk that we get stuck at the level of 6-7%. Someone can this inflation seem to be reasonable. In my opinion, it is absolutely not acceptable, because it is not the level of inflation, which is needed for investment growth. 6-7% is not an investment level of inflation,” she said.
“Now we see that there is a high uncertainty in external markets, this creates risks for inflation and budget. And our task is to ensure consistency and predictability of macroeconomic policy”, – said Nabiullina.
She noted that if inflation is at 6-7%, the nominal interest rate in the economy and the risk premium will be higher, thus may remain high volatility in the prices of financial assets and currencies.
“This implies that higher inflation will pay off a smaller amount of investment projects, investment activity will be lower. Therefore, our goal is realistic and absolutely necessary for the structural transformation of our economy,” said Nabiullina.