The Nezavisimaya Gazeta daily has published the opinion of Natalia Shagaida, Head of the Agricultural Policy Department of the Gaidar Institute on how the inflation rate affected the Russian’s consumer activity in January 2023.

The Nezavisimaya Gazeta daily reports that in 2023 the Russians reduced their consumer activity and switched over from spending to saving. At first sight, it is an ordinary situation for the beginning of the year, however, only comparison of the current trends with the relevant period of the previous year, a similar seasonal cooling of January 2022, gives a more complete picture. According to the Romir data, the Russians’ average incomes, with the inflation taken into account, fell as compared with the relevant period of 2022.

Natalia Shagaida notes that the Romir data do not make it possible to assess objectively households’ consumer spending. The expert attributes this trend to the previous month’s consumer activity, as well as seasonality.

An increase in purchases in nominal prices says almost nothing if incomes and inflation are not counted in, Natalia Shagaida explains. “With a high inflation rate, even an increase in purchases in nominal prices may mean a reduction in these purchases in volume terms. The Russians spend more money not because they buy more goods, but because prices for goods have appreciated,” Natalia Shagaida sums it up.