Inflation in Russia in 2011

According to Rosstat, in 2011 the consumer price growth rate in Russia amounted to 6.1%, thus demonstrating this country's historic low for the entire period of its latest history since 1991.
The estimation of the current status and further prospects of the development of the Russian economy rely strongly on the factors that influence the domestic market's development. The macroeconomic situation in 2010-2011 was shaped by the diminishing contribution of external demand in the dynamics of GDP. Changes on the domestic market in 2011 were determined by simultaneous growth of both the consumer and investment demand. The dominating influence on the macroeconomic situation in 2011 was exerted by the accelerating rate of retail turnover.

A typical feature of 2011 was an accelerating growth rate of the non-food commodities market against the backdrop of an inertia-induced slowdown in the rate of retail turnover of foodstuffs. Considering the fact that more than one-half of the commodity resources of the non-food commodities market is formed by imports, it is evident that this segment of the consumer market was more sensitive to the fluctuations of the ruble's exchange rate.

The population's consumer activity was strongly influenced by a low inflation rate. In 2011, the consumer price index dropped to 106.1% against 108.8% in 2010, including food prices - 103.9% against 112.9%, and prices of non-food commodities - 106.7% against 105.0% respectively.

From the data published by Rosstat it follows that over the last two years the consumer price index for the 10% of the population with minimum incomes increased approximately by 17-18%, whereas its growth for the top deciles group amounted to 12-13%. Thus, the year 2011 saw the same high level of population differentiation by the rate of real income growth.

An alarming aspect of that year's situation was the emergence of a trend towards a dramatic slowdown in the growth rates of real incomes of the population and real wages. The growth of retail turnover volume, as before, was based on a decline of the saving norm and increase in the volume of consumer crediting.

O. I. Izriadnova - Head of the Structural Policy Department