This article in Bloomberg is a perfect example of the type of inflation we mention in our prior post. Here’s an excerpt:
The rout of the ruble, the world’s worst-performing currency in the past three months, is raising the price of imported goods. Price growth, compounded by the effect of a ban on imports of some foods imposed by President Vladimir Putin in retaliation for the sanctions the U.S. and its allies enacted over Russia’s policy in Ukraine, has raced past a revised central-bank forecast of 10.1 percent.
Now keep in mind, if the Russian government is admitting they have 10.4 percent inflation, how high must ire really be? Twice that? Three times?
And while the government predicts it will start dropping after the next quarter, there is no explanation of why it would drop. Such comments are wishful thinking or perhaps attempts not to alarm the populace or the markets. Since they are measuring year-over-year, even a one-time rise in prices would persist for a year, if not quarter-over-quarter.
Not a good time to be a consumer in Russia.