From BOFIT today (as translated by Google):
According to the Russian Statistical Institute’s preliminary estimate, Russia’s GDP grew by 4% year-on-year in April-June. Growth has clearly slowed down in recent months. In June, (seasonally adjusted) production declined in industry and construction. In June, the long-continued growth also slowed down in consumption-driven sectors. The sharp increase in the average real monthly wage has slowed down and the level of the average wage has remained almost unchanged in recent months.
Although the growth in consumer demand has slowed down, domestic production and imports have developed even more poorly. The escalation of supply problems has further accelerated inflation. In July, consumer prices rose at the fastest monthly rate since spring 2022. According to the Russian Central Bank, seasonally adjusted and annualized inflation was already 16% in July. Compared to July of the previous year, consumer prices rose by 9%. Inflation was partially accelerated by the increase in the prices of regulated municipal services at the beginning of July.
Graph of production:
Source: BOFIT, accessed 8/15/2024.
Inflation is indeed getting rather high. Now 4% growth would not be terrible under normal conditions but we know a lot of production is being diverted to the invasion of Ukraine. Which does not seem to be going that well.
Someone at Vox must be working for Trump-Vance as he is claiming electricity prices are soaring. Kevin Drum corrects the record:
Today’s boring but true headline: The cost of electricity has not been going up
https://jabberwocking.com/todays-boring-but-true-headline-the-cost-of-electricity-has-not-been-going-up/
The words that jump off the page:
“The escalation of supply problems has further accelerated inflation.”
Not even a near genius central bank head can solve that problem. As much respect as I have for her (respect for her intellectually, not morally) I don’t think Nabiullina has a rabbit in her hat for that one. Possible solutions…… panhandling in Beijing?? That’s the only one I can think of, and probably also comes at some kind of high price. China NEVER does any deal they don’t get the tangible advantage.
Municipalities hiking service prices is their form of tax increases. That will not be received well by the population. An increase of inflation to 16% driven by that and supply problems is going to be hard to fight.