CBR analysts expect continued acceleration in proinflationary risks

MOSCOW. Jan 31 (Interfax) - The slower growth in consumer prices seen recently may turn out to be temporary, with a trend towards an increase in indicators of sustainable price pressure beginning to take shape, according to the Talking Trends bulletin prepared by the Research and Forecasting Department of the Central Bank of Russia (CBR).

"In 2023, the balance of risks is expected to shift further toward proinflationary risks. The budget has begun to become a pro-inflationary factor due to an increase in the budget deficit and its contribution to the growth of the money supply," Central Bank analysts said.

Factors related to lending and growth of real wages at rates outpacing productivity growth also added to the number of proinflationary risks, the Central Bank department said. "Possible intensification of consumer activity on the background of growing liquid savings of households and income growth at rates outpacing economic growth, as well as the weakening of the ruble carry proinflationary risks. Monetary policy will be aimed at returning inflation to 4% in 2024," the experts said.

At the same time, they note the preconditions for continuation of cautious consumer behavior due to high uncertainty and increased geopolitical risks. "The macroprudential limits put in place are likely to limit proinflationary risks in the unsecured consumer lending segment. The expansion of certain bottlenecks in imports and production will contribute to an increase in the supply of goods in the market, mitigating proinflationary pressure from the demand side," the Central Bank analysts said.

In general, they are not ruling out a gradual increase in inflationary pressure on the consumer market in 2023 compared with H2 2022.