The Ministry exceeding forecast annual inflation

Moscow. December 4. Inflation in Russia in 2015 may exceed the official forecast of 12.4%, since December in some weeks, the price growth may be 0.2% instead of 0.1%, said the Director of the consolidated Department of macroeconomic forecasting of Ministry of economic development Kirill Tremasov on the sidelines of the XIII Russian bond Congress.

He agreed with the assessment of the contribution of the Central Bank of Turkish food embargo 0.2 to 0.4 percentage points in inflation, but, in his opinion, it will affect inflation next year, and this year still have time to influence. “It seems to me that the assessment of the Central Bank (on the effect of embargoes against Turkish goods at the level of 0.2-0.4 percentage points to inflation) – this is a fairly adequate assessment. I think that this influence is likely next year. The fact that those goods the supply of which we restrict, are seasonal, say, those tomatoes – the crop is harvested, and some other goods of the peak supply falls in the following months. It will be distributed quite evenly in the first half of the year, a clear jump, I think we will not see”, – he commented the calculations of the Central Bank.

Official forecast Ministry of inflation in 2016 amounts to 6.4%. While Deputy economic development Minister Alexei Vedev in late November said that the Ministry expects inflation in 2016 in the range of 6.4-6.9 percent.

Tremasov in conversation with “Interfax” also said that the current quotations of oil prices are close to a conservative scenario of economic development of the Russian Federation for 2016, which was calculated based on oil prices at $40 per barrel, but the situation can change in 2-3 months and the Ministry will revise the forecast in the spring.

Tremasov also noted that the fall of capital investment in 2015 may be better than the forecast of 9.9% to reach 7-8%. The drop in retail turnover, on the contrary, he said, can be worse than the official forecast of 8.5% and exceed 9%.

“We are not yet officially corrected the forecast, but judging by the trends we see now, perhaps, the fall of investment will be less this year and will be around 7-8%. With regard to retail trade turnover is falling, on the contrary, may exceed the official forecast. Perhaps the drop will exceed 9%”, – noted the Director of Department of forecasting.

According to Rosstat, investment in fixed capital in Russia in October 2015 decreased by 5.2% compared with October 2014, after declining 5.6% in September, 6.8% in August and 8.5% in July. In General, during January-October 2015 investments fell by 5.7% compared to the same period last year.

The fall in retail trade turnover, according to Rosstat, in October accelerated to 11.7% versus 10.4% in September. For the first 10 months of this year retail trade turnover decreased by 8.8% compared to the same period last year.

Tremasov also noted that the GDP, cleared of seasonal and calendar factors, since July is not reduced and even “very-very” smoothly moves upwards, but this growth is unsustainable. “While the trends are different. With regard to consumer demand, the August episode, connected with another sharp drop in oil prices and another sharp fall of the ruble, it did not go away for the economy. This episode caused a new inflation acceleration and negatively affected consumer confidence, behavior. As a result, the stabilization, which is expected in the middle of the year, it did not take place. Recent months, especially October it showed consumer demand continued to decline”, he added.