Economists: prices for cars and apartments will rise in 2022
More products will increase the prices of real estate and cars. Economists in conversation with URA.RU told how prices will change in 2022, and assessed whether it will be possible to implement the plans of the Russian authorities — to reduce price growth to the level of 4% (in November 2021, inflation updated the record of 2016 - reached 8.4%).
Prices in Russia is growing due to outside influence
Modern inflation is not a purely Russian phenomenon. High price growth is observed all over the world, URA said.EN Head of the Department of State Regulation of Economics of RANEPA, Director of the autonomous non-profit organization "Institute of Public Finance Reform" Vladimir Klimanov. The cause was the coronavirus pandemic, which began in 2020.
"A completely new design has developed both for the production of various kinds of goods and services, and for their redistribution. Since many borders were closed, economic ties were severed, the production of various kinds of goods began to be carried out in a different way. The market of services has also been rebuilt, which, on the one hand, collapsed in many sectors, and on the other, opened new ones related to remote forms of their provision," Klimanov explained.
As a result, according to him, a "new reality" has formed in which consumers, given the availability of free resources, could not spend them for other purposes: air travel, tourism, concerts and trips to restaurants. Therefore, there was an increased demand for goods, which still dictates a rise in prices and an acceleration of inflation.
In addition, the delivery of energy resources and basic raw materials to a wide range of consumers has become more complicated, Klimanov added. Due to problems with logistics, prices for oil, gas and some types of minerals have increased. This led to an increase in metal prices, and then, along the chain, affected the entire global economy.
Despite the fact that global inflation is the main reason for the rise in prices in However, there are also internal factors that affect this indicator. These include the situation in the real estate market.
"We have a fairly strong internal source of inflation - a rise in real estate prices. In 2020, despite the crisis, real estate has risen in price by 10%. In 2021, the year will probably be 20%. Next year, it will probably rise again by 20%. Real estate for rent will grow even higher — an increase of 30% in some places of our vast homeland," URA said.EN Head of the Center for Political Economic Research Vasily Koltashov.
The economist noted that real estate prices will rise regardless of how the situation on the global market develops. According to Koltashov, she is equally affected by both the expectation of trouble and the confidence that everything will turn out well.
In addition, the increase in inflation provides an increase in utility tariffs, which occurs every six months. This ensures inflation in the region of 10%, Koltashov explained.
Is 4% inflation real?
Economists interviewed by URA.RU, consider this scenario not very realistic. Vladimir Kosoy, President of the Center for Economic Infrastructure, suggested that only an extraordinary strengthening of the ruble would help reduce inflation to 4%. However, such a scenario is completely unacceptable given the export orientation of the Russian economy.
"If we look at the inflation figures in the same United States, it has reached the level of the 1970s. Until the inflation rate is curbed in the United States, in Europe, that is, in the zones of the main reserve currencies, it is an unrealistic task to say that inflation will enter some corridor provided for by the previous plans of the Central Bank," Kosoy noted.
Koltashov agrees that it is impossible to achieve an inflation rate of 4% without strengthening the ruble. According to him, now the exchange rate of the Russian currency is undervalued. This protects it a little from sharp falls, but does not protect it from global inflation.
"In order for central banks and governments to allow [the strengthening of the ruble], they must stop being afraid of two things. The first is that the situation will not be destabilized by a new sharp drop in oil prices. The second factor concerns the fact that the military-political conflict in the Eastern Europe," the economist explained.
The market is afraid of war because of its uncertainty, Koltashov said. Accordingly, the words of Polish generals about how easy it is for them to reach Minsk, and the statements of Ukrainian President Vladimir Zelensky about the war against Russia, only aggravate the situation. Moscow needs to resolve the crisis in Eastern Europe in such a way that its credibility in world politics will grow, and foreign investors will understand that the economy will resist political conspiracies and military interventions.
"Politics has started to interfere very much in the economy. This is a sign of a new economic era. Therefore, accountants do not influence economic processes at all," Koltashov noted.
Another unpredictable factor is the coronavirus. The new strain of COVID-19 "Omicron" may reduce the demand for commodities and, above all, oil. This will entail a weakening of the ruble, URA explained.EN Valery Mironov, Deputy Director of the HSE Development Center Institute.
"If it is really dangerous and there will also be some lockdowns, a decrease in production, a decrease in transportation, flights and de
mand for raw materials, for oil, then there may be some weakening of the ruble. And then, it's beyond winter, it's not worth talking about it yet," the researcher noted.
According to Mironov, now the ruble is quite stable due to the large influx of foreign exchange earnings received from the export of raw materials into the country. In particular, it saves the high demand for gas in winter, which compensates for the decline in oil prices.
Mironov believes that the process of reducing inflation to 4% will be delayed for two years. The best that can be expected in 2022, according to the economist, is a reduction in the rate of price growth to 6%. Inflation in Russia may reach the desired 4% in 2023.
How will prices change in Russia in 2022
The coronavirus pandemic is unlikely to pass quickly, economists believe. The new strain of COVID-19 "Omicron" is now causing panic in the world community. Earlier, the ministers of health of the G7 countries called it the most serious threat to the global health system and the health of mankind.
During the waiting period for a new wave of coronavirus, prices for goods that are associated with a "new way of life" will continue to rise, Mironov believes. To them he attributed building materials that will be used for finishing houses in the suburbs, household appliances, computer and digital equipment and cars. These are the goods that will allow you to take shelter at home or in the country during a pandemic.
Also, the economist did not rule out an increase in real estate prices. In particular, people with high incomes will buy second and third homes as an investment asset.
Delivery is another sign of a "new way of life". The development of this market is another factor of an extremely strong and global impact on prices in Russia and around the world, says Nikolay Novoselov, Director of Development at Cuore Commercial and Industrial Company.
"The competition of delivery services is maximum and in some regions it turns into fierce competition with the taxi market for performers. Now both of these markets are gradually starting to become self-sufficient: bonus programs are being canceled, minimum checks for food delivery are being increased. In the near future, customers will start paying for the service that investors subsidized in 2020-2021," the analyst believes.
Novoselov advises citizens to test food delivery services right now if they postponed it for later. In the future, the cost of this service will increase not only due to competition, labor shortage, but also due to the rise in price of transport.
In particular, the car market may be affected by the global shortage of semiconductors. "There is a long investment cycle, huge investments that will last for a year or two. The rise in the cost of household appliances, cars, including related to this. This may continue next year," Mironov said.
At the same time, economists advise not to be afraid of a sharp rise in food prices. Prices for vegetables and fruits may rise on the eve of the season — last year's stocks are already running out, and new ones have not yet appeared in warehouses. Their cost will peak in the spring, Koltashov suggested. Mironov assumes that the market will take into account the lessons of this year and increase the production of fruit and vegetable products. "There are a lot of technologies in agriculture that can be put into operation. Any, including genetically modified products, although they are not in demand," the economist noted.
