Expert opinion: growth in prices for goods and services slowed down in Crimea
The main factor in reducing inflation in Crimea for the second month in a row remains the effect of a high comparative base, since the price jump that occurred in April last year was taken into account. As a result, annual inflation in the republic in April 2023 slowed to 3.2% after 4.5% in March, while in April last year this figure reached 18.2%.
Then, against the backdrop of increased sanctions, production and logistics chains were disrupted, which led to an increase in costs for imported components of manufacturers of confectionery, detergents and cleaning products, perfumes and cosmetics. As a result, prices for these groups of goods rose significantly in April last year. Also, the prices of these non-food products were affected by a reduction in their assortment, since in the spring of 2022 some foreign factories ceased their activities in Russia.
This year, the increase in domestic production contributed to the restoration of the supply of household chemicals, perfumes and cosmetics, as well as confectionery. As a result, annual growth in prices for shampoo, toothpaste, hand and face creams, biscuits and sweets slowed down in April, and the price of washing powder even fell. An additional impact on such price dynamics for non-food products was the establishment of supply chains for parallel imports.
Also, there are more dairy products on the shelves — manufacturers in the whole country have increased their production. At the same time, livestock breeders’ expenses on feed decreased against the backdrop of lower grain prices, growth in feed production and state support for the industry. As a result, the price of cottage cheese fell in April and the rise in prices for fermented milk products and yoghurts slowed down.
In April last year, due to the increase in the costs of road carriers for the maintenance and maintenance of the transport fleet in the republic, the tariff for travel in urban public transport was indexed. In the current year, the revision of carriers’ tariffs took place earlier — in February, so the price did not change in April. This led to a slowdown in the growth of prices for travel in city and intercity buses, trolleybuses and trams.
According to the forecast of the Bank of Russia, starting from May, as the low values of monthly increases in summer-autumn 2022 are taken out of the annual inflation calculation, the annual inflation rate in the country will begin to grow. In the baseline scenario, taking into account the ongoing monetary policy, annual inflation will be 4.5-6.5% in 2023, return to 4% in 2024 and stay close to 4% in the future.
source: Branch for the Republic of Crimea of the Southern Main Branch of the Central Bank of the Russian Federation
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