The scale of inflationary pressures in Russia. The strongest increase in inflation since 1998

[DARPA]

Dotargetirovalis. Inflationary pressures in Russia a huge, monstrous it ... If it were not for the service sector, limiting the general rise in prices (mainly due to HUS, communication and transport), inflation could be quite prohibitive. However, the service sector has a feature to respond to rising prices with a delay of 6-12 months, so after the rise in commodity prices will weaken, the inflationary pressure will be maintained sector services.

In January the monthly price growth was 3.9% (January 2015 to December 2014) - is the maximum price increase since 1999! In December, prices rose over the month by 2.6% - the largest increase since 1998 already! In November by 1.3% -Maximum since 2002. In annual terms, an increase of 15% (January 2015 to January 2014) - is the highest rate of inflation since the summer of 2008 and 2002 are comparable.
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From the moment when Russia began an uncontrolled collapse of the currency market (late October 2014), prices increased by 8% according to official statistics. This is over 30% on an annual basis.

Usually in Russia applicable rate of one to three on the extent of the devaluation of the ruble. For example, if the dollar rises against the ruble by 50% per year (on average monthly exchange rate) - this leads to inflation of about 15-17% per annum, if the rise of the dollar is more than 100%, the inflation rate is close to 35% (yy).
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This is due to the structure of consumer spending and the degree of penetration of imported products in the retail market, the dependence of Russian producers from foreign components. In Japan and Korea, where the majority of consumer spending is closed on national manufacturer, is very limited exposure to the negative effects of the national currency depreciation. In Russia, of course, different. The share of national manufacturer of products in the segment of retail sales of durable goods is not higher than 20%. Under national manufacturers understand Russian manufacturer (brand), most of the components and equipment which also Russian. For more details regarding the share of imports here.
So devaluation automatically affects the retail prices, there are no miracles.

The problem is compounded by the fact that in contrast to previous crises, now the growth rate of nominal income close to zero. Ie majority of the population of Russia at hand are paid about the same as a year ago. According to statistics from Rosstat, December nominal monthly salary amounted to almost 42 thousand rubles to the payment of personal income tax for all employees (considered as the wage fund, net of insurance premiums divided by the average number of employees for the period). By December 2013 growth of only 5.9% - this, incidentally, the lowest growth in nominal wages in the history of modern Russia.

The average salary for the year 32.6 thousand rubles (+ 8.2% in 2013). This is again the lowest rate of growth of wages in the history of Russia. Until 2014 the last 3 years the average nominal wages grew by 12-13% per year. Before the crisis of 2008 to 25% annual growth was typical.

Given the record for 15 years, inflation is logical to assume that the real income all bad? It is.
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By December 2014 the fall in real incomes amounted to 5.9% (which is worse than in 2008). And in January 2015, taking into account the known rate of inflation and the estimated revenue growth, the drop in real wages accelerated to 7.9%. Bottom of the crisis in 2008-2009 was July 2009, when the drop in revenue was about 5%. It is now twice as worse than in 2008, assuming a further acceleration of inflation.

Last time something similar happened only when the default of 1998 after the collapse of the USSR in 1992 (where the real income for the year fell to 35-40% per year).
Ie The current depth of the crisis in Russia exceeds 2008! But the worst is likely yet to come, because public sector wages may even fall in nominal terms in 2015 (or grow close to zero), because falling revenue base budget (after the collapse of oil prices) and difficult process of deficit financing gos.byudzheta. Business also has no special features to raise incomes above the rate of inflation, as demand and profitability falls, if necessary, to extinguish debts against the backdrop of a blocked lending by the Central Bank of the Russian Federation.

In general, everything looks a little more dramatic than I had imagined in December. While formal structures of government and all there MED forecast inflation in 2015 is below 10%, I, because of their boundless optimism and cautious about inflationary pressures in the 15-17%, but we flew over this line at the beginning of the year and go on a trajectory to 20% and above. The estimated inflation in 2015 could reach 22-25% by the end of the year (annual average) and up to 35% at the peak in the middle of the year.

All this may lead to the fact that real incomes decline by 15% or more this year, which would be a disaster for many. It is worth noting that one of the biggest drivers of consumer madness in Russia was a credit expansion. Borrowed on everything that can be taken. The total credit load of the population increased almost 3 times from 2010 to 12.2 trillion (in December 2014), of which 3.5 trillion in mortgages. Monetary diversion Bank in 2014 will lead to the fact that not only new loans will not be able to take, but by the old board.

After stagnating incomes and a record rise in prices for 15 years, a large portion of the proceeds will go to compulsory payments and expenses (food, housing and communal services, transport), and taking into account the debt service and any insurance costs can exceed revenue and opportunities for cost optimization is not much. So many borrowers bankruptcy in 2015 will become commonplace.

What categories of goods prices rose the most?
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continuation
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Red in the table - the maximum inflation pressure for the selected category of goods or services for the month of January from the previous month (December), green - the minimum inflation pressure.

It is evident that services several constrain general rise in prices, but still exorbitant growth, incredible almost all categories. Most brutally prices rose for fruits and vegetables (22%), fruit (almost 17%), and fish and canned above 5% for medical goods and medicines above 6% for appliances and other household appliances as above 6% for passenger cars a record 5.6% (in January never so much did not grow). It's all in the past month, that is, January to December !!

And the dynamics of year-to-year in the month of January.
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continuation
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By the way, in January the average salary in dollars of about $ 480 (up to PIT) - as well as in February 2009 and March 2007, ie dollar salary for 8 years did not increase))

In annual terms, the collapse of 45%. In the crisis of 2009, when the ruble sank from 24 to 36, the salary in dollars fell by 23% in annual terms. 45% and only fell below 1998.
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Ie by a combination of factors: the rate of inflation, real wages and nominal ruble dollar salary, we returned in 1998 ... CBR to be congratulated. Dotargetirovalis same! Good job with limited inflationary pressures. But then how to look? From the perspective of US assistance worked well in terms of the national economy and fin.sistemy - a complete disaster.