19 May 2022 13:20

Ruble rate last year was "artificial," now it is "absolutely market-based" - Oreshkin

MOSCOW. May 19 (Interfax) - The gains in the ruble reflect a strong balance of payments, and this year's exchange rate is "absolutely market-based" in contrast to last year, when it was "artificial," presidential aide Maxim Oreshkin said during the New Horizons forum held by Russia's Knowledge association.

"I was talking about a strong balance of payments. I will make a small digression. Here's the question: why is the ruble strengthening? Many people say that the ruble is some kind of fake, trying to deny reality, but in fact the exchange rate was artificial last year, this year it is absolutely market-based, without any external influence," Oreshkin said.

In Oreshkin's opinion, the contraction in the Russian economy in 2022 should be significantly less than the current forecasts of the Economic Development Ministry and the Central Bank of Russia (CBR), and it should not exceed 5%.

As previously reported, the CBR expects Russia's GDP to contract 8%-10% in 2022, and the Economic Development Ministry forecasts a decline of 7.8% in the baseline scenario and 8.8% in the conservative one.

According to Oreshkin, inflation in the year will not exceed 15%, and consumer prices for a number of goods have already begun to decline, with a steady deflationary trend expected in the coming weeks.

"There were a lot of negative forecasts on inflation in general - 20%, 25% inflation. Now we can say with confidence that in 2022, inflation in our country will not exceed 15%," he said.

"This means that from now until the end of the year, the rate of inflation will not exceed the Central Bank's target level of 4%," the official said.

He noted that there has already been a slowdown in inflation. "We can see that our weekly inflation is now slowing down, in the coming weeks we will already arrive at a fairly stable deflationary trend," Oreshkin said.

The situation with prices in general has stabilized, there has been a decrease in prices for some groups of goods, Oreshkin said. "We see that the situation in the market has now stabilized, inflation is already going down, prices for many goods are already going down. Those who, for example, bought electronics in March, I think, now already regret those decisions, because the same goods can often be bought at lower prices," he said.

He recalled that the state had previously decided not to regulate the prices of certain types of goods. "If you remember, in March there was a lot of talk, especially when prices jumped, for some products they jumped by tens of percent, somewhere even several fold, there was much talk suggesting 'let's regulate prices, let us fix them.' In reality, the president made a strategic decision not to micromanage prices. As a result, where prices went up, entrepreneurs got the signal that it is possible to make money here," Oreshkin said.

The Economic Development ministry is forecasting inflation in Russia in 2022 at a level of 17.5%. This forecast is lower than the expectations of the Central Bank of Russia (CBR) at the end of April (18-23%).