Because of the sanctions food will grow by 13 percent

Ministry of Economic Development of the sanctions increased the estimate of growth in food prices in 2014 to 12-13% compared to 7.2-7.4% projected earlier, according to the Ministry of Economic Development approved the macroeconomic forecast until 2017.

In other commodity groups (non-food products, market services), the rise in prices will be lower than previously projected, due to strengthening demand constraints.

The materials of the Ministry states that fell under the sanction of raw materials and food imports in the main part was cheaper than domestic raw materials (milk, cheese and meat products, fish) that keep the prices of domestic agricultural producers and processors.

When substituting domestic processors of raw material imports from countries that have fallen under the sanctions, the more expensive imports will increase inflationary pressures, given the low profitability of their production. For example, in the cost of the meat and dairy industry, the share of raw material is 70 to 85%.

This situation will lead to a reduction in production and consumption, as well as higher prices for other products by switching demand and redistribution of the trading margin in order to avoid price spikes.

«In connection with this increase in food prices in January-December 2014 may reach 12-13% versus 7.2-7.4% projected earlier, as a result of inflation increased to 7.5% vs. 6, 0% "- assesses the MED.

This forecast is available with the full replacement in the fourth quarter got under sanctions imported food commodities, as well as filling in missing imports of finished products, in general, the replacement must be at least 80-85% by the beginning of the fourth quarter.

According to the Ministry of Economic Development of Russia, the share of imports, which fell to the sanctions in the amount of food imports in the second half of 2014 is more than a quarter, and in the food trade turnover - more than 15%.

In the future, the increase in food prices will also make a significant contribution to inflation, even though it will slow down, according to MED, to 5.5%. In the first half of 2015 the rise in prices will also be higher than previously predicted values​​, and the second, on the contrary, will be lower in the case of the completion of the sanctions regime on food imports at a significant increase in the supply of goods.

If this is expected to increase production from domestic producers in the new agricultural year 2015-2016 to the weakening of import competition.

In 2015 growth estimate increased tariffs for housing and communal organizations. For other goods and market services price growth will remain very modest. As read in the MED, it will be constrained by stronger constraints demand of the population.

in 2016-2017, inflation will continue to slow down - to 4.5% and 4%, respectively. Medium-term inflation reduction will contribute to a moderate increase in income, relative stabilization of the nominal exchange rate, the Bank of Russia for control of inflation measures of monetary policy, while maintaining restrictions on the growth of communal tariffs in the range of projected values​​, noted in the MER.

Source: Agency AgroFakt