Sergei Tsukhlo: “Inflation in manufacturing turned out to be three times normal”

Sergei Tsukhlo, Head of the Business Surveys Department, Gaidar Institute answered the questions of the Nezavisimaya Gazeta about industrial producer price increases in Russia; as per Rosstat’s data they appreciated by nearly 30% over a year, having exceeded by 200% the consumer price inflation. It is noteworthy that the manufacturing is not only increasing output, but has already surpassed the pre-pandemic level.

“The manufacturing outlook index based on forecasts of demand, output and employment showed impressive growth on average in 2021 and the best result in 2008–2021,” said Sergei Tsukhlo.

According to Sergei Tsukhlo, demand forecasts showed the highest increase in optimism: the result of 2021 (+ 14 points) has become the best one since 2007. Based on results for 2021, the manufacturing’s highest “optimism” was registered in price change and costs forecasts. “Enterprises’ inflation expectations gained +32 points and hit the 19-year maximum. In 2020, owing to the government’s consistent efforts this indicator fell to the historic minimum of +7.7 points (throughout 1992–2021). A more “impressive” result was achieved by enterprises in forecasting their costs. The balance of expected changes in manufactured product costs increased up to +44 and became the record-high so far in the 21st century,” Sergei Tsukhlo noted.