SERGEY ZHAVORONKOV: A WEEK-LONG DECLINE OF CONSUMER PRICES IN THE SUMMER IS A CUSTOMARY PHENOMENON

A week-long decline of consumer prices in the summer is a customary phenomenon, to be followed by a seasonal rise in prices. This opinion was expressed by senior researcher of the Ye. T. Gaidar Institute for Economic Policy Sergey Zhavoronkov in response to the recent announcement by Rosstat that over the course of one week the general level of prices for goods had dropped by 0.1%.

Sergey Zhavoronkov then clarified his point of view as follows. ‘Summer deflation [Editor’s note: a decline in the general level of prices for goods and services] is a customary phenomenon taking place in many countries. Its cause is quite simple – a new harvest. In wintertime, greenhouse fruits and vegetables are more expensive than their open field grown counterparts in the summer’. According to Mr. Zhavoronkov, for this reason alone prices for some goods can change exponentially from one season of the year to another. For example, Azerbaijani tomatoes ‘can cost 150-200 rubles per kilo in the summer, and 350, 400, 500 rubles in the winter’, noted the expert.

Mr. Zhavoronkov made it clear that the seasonal factor does not impact all goods. ‘But on the whole, the factor of summer crop yields is of predominant importance. No mystery here – on the contrary, it would have been amazing if this phenomenon did not take place in the summer’, emphasized the expert.

Previously Rosstat had stated that during the period July 23-29, 2019 the price of granulated sugar dropped by 1.2%, the price of sunflower oil shrank by 0.3%, while prices for smoked sausage, frankfurters, margarine and buckwheat grouts declined by 0.2%. Cucumbers, potatoes, carrots and onions also became cheaper. The last time deflation of such magnitude occurred was in early September 2017.