Translated material
Tariff per hour
The Kremlin and the White House are unhappy with the price behavior
The authorities are alarmed by their own actions. A noticeable increase in prices and tariffs for several “socially significant” items at once (medicines, transport, energy) caused a chain reaction of very harsh statements and steps in the Kremlin and the White House.Yesterday, the president summoned the head of the Pension Fund, Mikhail Zurabov, and demanded an extraordinary increase in pensions from February 1 by 6.5% for all groups of pensioners (the next increase is scheduled for August 1). This measure, agreed, as Vladimir Putin noted, with the prime minister, should compensate for increased inflation and, above all, new prices for medicines. At the same time, the president expressed regret that the government is unable to curb price increases.
In turn, at yesterday's meeting the government unscheduledly “squeezed” natural monopolies: electricity tariffs will increase by an average of no more than 18%, gas - 20%, railway transportation - 16%. Considering that the White House has so far agreed to a 35% increase in tariffs over the course of the year, and the monopolies have asked for even more, this decision seems quite harsh. At the same time, at the cabinet meeting they talked about limiting the growth of costs in monopolies, realistic budgets and investment plans, i.e. the signature theses of presidential adviser Andrei Illarionov were reproduced close to the text.
The authorities officially realized that prices were behaving “indecently” and that the planned plans would only increase the degree of “indecency” immediately after the winter holidays. Mikhail Kasyanov, who returned from it, immediately canceled the decision taken in his absence to increase tariffs for railway transportation. At the same time, he postponed the decision to increase duties on used foreign cars. But the office was especially alarmed by the New Year's rise in drug prices - a more painful effect, literally and figuratively, could not be imagined.
Meanwhile, the “average hospital temperature” across the country does not look tragic at all. Inflation rates at 15-20% - i.e. what we had last year and what we can roughly expect this year - although they exceed what we wanted, but not so much as to tear out all our hair. In addition, last year’s main source of inflation (the generous flow of dollars that the Central Bank buys from exporters, printing rubles in exchange) is now seriously drying up.
However, the authorities have every reason to pull at least one or two strands from their heads. The fact is that within just a couple of weeks, plans were announced or prices and tariffs have already increased in several areas that are sensitive to the population. It turned out that everything happens “in one bottle” and almost simultaneously. How should the average consumer, who over the last couple of years have become accustomed to a more or less smooth flow of life, react to this?
The authorities calculated some things, for example, about the impact of monopoly tariffs on the overall level of inflation in the country: they came to the conclusion that it would not be dramatic. But they miscalculated some things, for example, what the combination of different increases in different consumer prices would look like. The most serious and unpleasant miscalculation is the medicinal one. Deprived of the previous VAT benefits, medicines, which were already expensive, partly in short supply, and partly counterfeit, have risen in price beyond all plans and forecasts. The fundamentally correct course of the Ministry of Finance to rid the tax system of endless benefits turned into a rather stupid fight against any, even temporary, deviation from the proclaimed rules. Whether it was medicines, books, or disabled people - she died that way. And no, even timid, plan or mechanism to compensate for what certainly needs to be compensated. What was the responsibility of the authorities? The point is to tell the tax aces of the Ministry of Finance: this, guys, is not possible. Because such “purity” of tax policy will cost us more.
Because now you still have to compensate. And it’s not just about the 36 billion additional rubles that, on an annual basis, should go as an addition to pensions in exchange for the “medicinal effect.” The point is also in tariffs, which, for example, for gas will still have to be increased. The point is also in the housing and communal services reform, which still cannot be avoided.
But how to reform now? Should you invite the head of the Pension Fund to a conversation every time? This year there is already a deficit in the fund; it’s good that Mr. Zurabov still has a “transition balance” of 110 billion rubles from last year.
Macroeconomists are right to reassure us: terrible inflation is not awaiting us in any case. The question is different: are new bruises and bumps waiting for us, filled almost out of the blue, with a relatively favorable economic and political situation.