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Russia’s inflation to go down to 3% a year by 2030 – Economic Development Ministry

In 2012-2015, the index is forecasted at the level of 5.6 percent a year on average with further decline to the point of 5.2 percent before the end of the period

MOSCOW, January 30 (Itar-Tass) – Russia’s consumer inflation rate will remain higher than the indicators of the world’s most developed countries about up to 2022-2023, the Russian Economic Development Ministry declared in its long-term forecast of the country’s social and economic development in the period up to 2030.

Under the document, “the effect of the kind will be caused by several key factors, including the projected weakening of the rouble rate, the hike of the world grain and food prices, the outrunning growth of infrastructure companies’ tariffs for the population due to the cross-subsidy abolition, as well as the advanced hike of housing and municipal tariffs simultaneously with too intensive wearing of utility systems and the necessity to cover investment spending and to raise them for the self-repayment level.”

The ministry is confident that the growth of prices will also be supported by the hike of the population’s wages and incomes, which, in turn, raises the population’s payment capacity.

In compliance with a basic (innovative) scenario of development, the inflation will stand at about 4.7 percent a year on average in 2016-2022. In 2012-2015, the index is forecasted at the level of 5.6 percent a year on average with further decline to the point of 5.2 percent before the end of the period.

Proceeding from an accelerated growth scenario, which envisions fulfillment of the Russian president’s decrees singed in May 2012, the inflation rate will be at 4.1 percent a year, which will be determined rather moderate weakening of the Russian rouble rate, the ministry wrote in the document.

Based on this, the housing and public utilities’ tariff growth dynamics will be more moderate (7.0-7.2 percent a year) owing to the smaller increase of prices for energy resources, which is based on the global market prices in the rouble equivalent.

“In the period from 2023 through 2030, the forecasted inflation rate will be more than in the innovative scenario – 3.2 percent a year, if the moderate weakening of the rouble rate is being kept,” the document wrote. Besides, the tariffs for housing and public utilities will go up by 4.5-4.8 percent mainly due to more upward dynamics of prices for energy resources.

Under a conservative scenario, the country’s inflation rate will be a bit more than the indicator envisaged by the innovative scenario and make up 4.8 percent on average in 2016-2018. In this period, the ministry forecasts more considerable weakening of the Russian rouble rate, which will be balanced out by more moderate growth of the population’s incomes.

For the period from 2026-2030, the ministry’s long-term forecast envisages the decline of the country’s inflation rate to 2.6 percent under both innovative and conservative scenarios, and to 3.0 percent in compliance with the accelerated growth scenario.