“The most vulnerable will suffer.” Nabiullina warned about the risks of double-digit food inflation

Central Bank Chairman Elvira Nabiullina spoke about the risks of high inflation and urged to reduce price increases as soon as possible.

“In our country, inflation was low not so long, only four years near the 4% target. Now it is twice as high, and the food supply is already, unfortunately, double-digit, ”Nabiullina stated in the State Duma (quote from TASS ).

The head of the regulator warned that the most vulnerable groups of the population are at risk first of all: “The lower the income of a person, the more products occupy his personal consumer basket, which means that inflation hits him first. If we miss inflation now, then the least protected groups of the population will suffer.”

• According to the Ministry of Economic Development, food inflation reached 10% in mid-October. This autumn, food inflation dominated consumer inflation, but in the last week it was outstripped by the rise in prices for non-food products.
• The target level of the Central Bank considers inflation in the region of 4%, but now it is much higher. According to Rosstat, consumer prices in Russia increased by 8.13% year-on-year in October, the last time such an increase was recorded in January 2016.
• This week, Nabiullina predicted a return to the neutral level of the key rate of 5-6% per annum no earlier than mid-2023. Now it is 7.5% - a radical decision to raise the rate in October by 0.75 percentage points at once. due to the steady acceleration of inflation.
• The Central Bank assumed that inflation in Russia at the end of 2021 would be closer to the upper limit of the forecast range of 7.4-7.9%.
• Nabiullina does not believe that the policy of the Central Bank slows down the economy: “When we are told that high inflation can be allowed, the main thing is to keep the rate low so that credit grows everywhere, we cannot agree with this. Inflation is a real problem that makes people poorer.” The Chairman of the Central Bank did not rule out further tightening of monetary policy at the next meetings of the regulator. The next one will be on December 17th.