Evgeny Goryunov, Head of the Monetary Policy Department at the Gaidar Institute, has commented to RBC on the findings of the RF Central Bank’s study which indicate low confidence of Russians in inflation statistics. The expert noted the difficulty of taking inflation expectations into account when carrying out monetary policy.
According to Evgeny Goryunov, inflation expectations growth is an alarming signal for the regulator, as it indicates a drop in confidence in the ruble and demotivates savings in the national currency. "On the other hand, the previous reasoning is mostly based not on facts, but on assumptions about how real people should behave. We do not yet have reliable data on how they actually behave and how their economic behavior is related to the inflation expectations declared in the surveys. There are only indirect signs that our theoretical ideas about human behavior are correct. Therefore, critics are partly right who say that inflation expectations measured in surveys should not play a big role in making decisions on the rate, as this is a vague indicator that does not carry any critical information about the state of the economy, but rather reflects the perception of current price dynamics", the expert concluded.