Evgeniy Goryuov, Head of the Monetary Policy Department at the Gaidar Institute, stated in a commentary for Izvestia that deflation observed in Russia is seasonal, it is not a long-term trend. The expert emphasized that price growth should be expected again in early autumn.
"Already in early autumn, this process will get into a groove, i.e., towards higher prices. To assess price trends, the inflation rate cleared of the seasonal factor has to be taken into account. Thus, if a seasonality adjustment is allowed, it turns out that our inflation rate is about 3-4%, which looks nothing like deflation at all," noted Evgeniy Goryunov.
However, commenting on the growth of household inflation expectations, the expert emphasized that “they largely reflect the current price dynamics, i.e., people simply extrapolate into the future what they see today. They think that if prices are rising now, then they will rise in the future. In July, utility rates were raised, and everyone noticed it. The rise in inflation expectations is an echo of the tariff increase, and nothing more."
In conclusion, Evgeniy Goryunov noted that he does not see any signs of weakness in the Russian economy despite deflation. "The level of demand is not considered weak, unemployment is low, utilization of production capacities is high. The volume of issued loans is growing. The rate of output growth continues to slow, and there are some concerns about the state of the budget deficit at the end of the year, but I would not call it an extreme weakness,” the expert explained.