The national Bank failed — inflation held only by admresursa

In the year 2020, the national Bank managed to join without the pillars of its monetary policy. That is

in fact, without officially announced the horizon of monetary planning

The Russian Central Bank in October last year approved guidelines for the single state of the OST for the years 2020-2022. It is not surprising that among the key partners in the EEU has developed significant differences in the priority macroeconomic parameters.

Russia: rates of growth of prices declined

Last year, Russia has completed with annual inflation at 3.0%. This is much below the forecast of analysts of the Central Bank, prompting the latter to reduce the key rate to 6.25% per annum to the end of the year. Moreover, the Board of Directors has declared the advisability of further rate cuts in the first half of 2020.

According to the medium-term forecast, this year inflation will rise to 3.5-4.0 per cent per annum, and in 2021 or 2022 will be at the level of 4.0%, which corresponds to the official inflation target.

As can be seen from the data of Rosstat, the year in Russia to the greatest extent, increased prices for paid services for population – 3.8 per cent. This is followed by non-food (3.0 per cent) and food (2.6 percent) products. In comparison with December 2018 annual inflation for these items is clearly slowed down. And to the greatest extent on food from 4.7% to 2.6%.

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Kazakhstan: anomalies in comparison with Russia

In Kazakhstan inflation by the end of 2019 was much higher at 5.4%. As the base rate of the national Bank, which since September is kept at 9.25%.

Although formally, the national Bank was within the forecast corridor of inflation of 4-6% per annum, a special merit in this. As follows from the data of Agency on statistics, the main anti-inflationary anchor has performed paid services for the population. And then only because the tariffs are tightly controlled by the government after order of this Nation, even in the fall of 2018.

In annual terms, these services rose only 0.7%. On the background of the relevant Russian data, this seems an anomaly.

Statistical contrast look and higher price growth rates for food and non-food products in Kazakhstan. It is clear that

if the government did not hold the prices for paid services, inflation would exceed the upper limit of the forecast corridor

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History is not in favor of Kazakhstan

Historical data for the last five years confirm a more consistent and efficient policy of inflation targeting of the Central Bank compared to the Bank.

So, from 2015, annual inflation in Russia fell by 9.9%, in Kazakhstan by 8.2%. The last two years we have it is almost on the same level, whereas in Russia fell even below the official target.

A similar situation exists with interest rates of Central banks. Although Russia key rate was reduced in 2015 by 4.75%, and in Kazakhstan – by 6.75% and the cost of borrowed money in the neighboring country is still lower than in Kazakhstan. This gives the added advantage of Russian banks and manufacturers in the competition for positions in the domestic market.

In addition, lower mortgage and consumer loans. The difference between the value of rates and annual inflation is closer to 3.25% in Russia and 3.85% in Kazakhstan. This negates the previous advantage of savings on Bank deposits in our country.

This year’s first decision on the base rate of the national Bank will take on 3 February. The Central Bank of Russia on 7 February.

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