Deflation continued in Russia

In the week by June 17, deflation was again observed in Russia, and at the same pace as the previous week - 0.12%, follows from the message of Rosstat. Inflation in annual terms decreased to 16.42%.

• The main contribution to the decline in prices was again made by food products (-0.25%), while the cost of fruits and vegetables was falling faster (-2.46%), the Ministry of Economic Development writes.
• For tourism and regulated services, the decline in prices accelerated (-0.38%), in the segment of non-food products, prices are stable for the second week in a row.
• Actual deflation in Russia has been observed since the end of May (with a break for one week of zero price growth) - there has never been such a long period at this time. Both the government and economists are discussing it as a problem: Minister of Economic Development Maxim Reshetnikov is seriously concerned about the prospect of maintaining deflation in June.
• There is nothing good in deflation: it speaks of a reduction in demand in the economy. If deflation drags on, manufacturers lose money, reduce investment and staff, unemployment rises, and as a result, demand falls even more - a deflationary spiral is set up that can take years to get out of. The Central Bank sees no signs of a spiral .