Russia refutes the laws of economics – Rosbalt
According to official reports, the material affairs of Russians are on the mend. Posted a couple of days ago report Rosstat on price movements in the past is rich in good news. “They became cheaper: electric vacuum cleaners floor – by 14.1%, electric irons – by 11.3%, washing machines – by 8.5%, refrigerators – by 7.7%, electric kettles – by 7.1%, smartphones – by 5 .6%, jewelry – by 5.0%, imported second-hand cars – by 1.3%. And this is not the whole list.
It is quite possible to think that the laws of the economy do not apply in our country, and all this stream of Western trade bans has gone to be used only by domestic consumers. Most of the statements coming from the Russian governments lead to the same idea.
However, back to earth. And for example, let’s look into the mystery of cheaper “light cars of imported pupils.”
Volumes of new purchases of passenger cars in Russia dropped in the past by 78.5% pending with the prospect of a year ago. That is a drop of more than four times. This is clear. They are not imported from abroad, and more assembly parts are required for installation, which are also not allowed to pass. probably, motorists should rush after the delayed cars. But here is not. In the first number of cars up to three years old put up for sale (Russian and imported) the fall on an annualized basis by 11%, and for the first half of May – by another 15%.
The market demands that were still in force in our country suggest that if the supply of a commodity is a sharp supply, then its prices must rise no less sharply. And what about the reduction in the cost of cars by Rosstat?
Although I do not believe in it, at least for a moment, that it really does take place. What does the decrease (or at least not a sharp sharp increase) in the price of goods indicate against the background of falling supply? Yes, only that the demand for this product is no less radical. People have less money and more desire to urgently save at least some for a rainy day, the setting of which they guess. Therefore, they save on all purchases that can be postponed, from cars to smartphones and jewelry. Prices for all this went down, demand should have fallen very much.
As for imported or similar goods, it is difficult to find a purchase, as a result of checking road conditions: “Toilet soap – by 12.0%, sanitary pads – by 11.9%, toothpaste – by 8.1% , washing powders – by 7.3%, dry pet food – by 7.2%, toilet paper – by 6.9%.
But in early April, consumer price growth looks lower than expected (+1.6%), although it still exceeded three times the inflation rate of last year’s April.
It seems that one can come to terms with the fall of life and expect that at least the level of insane price surges has been left behind. Another financial sign that has been working for us for decades leads to optimism in this Georgia. Namely: if oil becomes more expensive and the ruble gets stronger, then imported goods become cheaper and more accessible to the people, and inflation slows down.
The ruble is now strong. Oil is expensive, as in the best of times. What about imports? And here we see a flagrant non-compliance in Russia with another law of economics.
In contrast to price information, Rosstat is clearly in no hurry to report to the public on the April state of merchandise imports. But some numbers have leaked out. On Monday, the Central Bank published data on the balance of Russian trade in goods and services for January-April cumulatively. And this balance is based on a lasting impression on everyone who is in the subject. The positive balance of Russian trade reached $107 billion during these four months against $35 billion during the same period last year.
What is the focus here? To publish only the import of goods to Russia, and only for April 2022, the Central Bank did not dare on its own behalf. But the MMI Telegram channel, which he considers close to this institution, is an estimate published, looking for data on exports and imports for January-March and its own estimate of Russian exports for April in high-level calculations. The results were absolutely sensational:
“The Russian Federation can hardly increase the volume of exports in physics. (i.e. in historical documents compared to the previous month – ed.), a ridiculous failure in oil and gas production. Nominal cell growth potential due to higher price level (compared to past oil prices – ed.) If we assume a 20% nominal growth in exports, then the import estimate for April is $9.4 billion (-70.5% yoy). If the nominal growth of exports was 10% yoy, then imports amounted to $5.3 (-80.3% yoy). We translate that an estimate of 70% to 80% year-on-year imports is the most current. Such a scale of international trade of the Russian Federation is shocking … “
Yeah. According to this calculation, the import of goods to Russia in April 2022 fell to $5–9 billion and arrived three to five times against April 2021. If such volumes are maintained in the future, then for the year merchandise imports are used in the range of 60-110 billion dollars. It was within these limits that the import of goods in Russia fluctuated from the early 1990s to the 2000s (then it was close to the beginning of up to $50 billion, sometimes the rate was up to $30 billion, but to convert to today’s dollars you need to multiply by two).
At the same time, even now export earnings are very high (on an annualized basis – a good 500 billion dollars, if not more). And the proceeds are received for imported goods almost on the occasion of an exception. A large economy, consisting of foreign trade income, cannot convert it into the importation of goods – such as in the world after the second world war, there is probably an emergence. Russian imports collapsed. At the same time, by the way, is the secret of a super-strong ruble. The country is full of dollars, but most of it is impossible. I rub well, the economy and citizens – no.
Western sanctions are still weakly restricting Russian exports. Most likely, this is a temporary phenomenon, and besides, somewhere in the fall, export earnings will also go down. But the average Russian will feel the collapse of imports earlier.
With the volume of imports of foreign goods at the level of the 1990s, it is impossible to maintain even the current, already acceptable national consumption standards. A serious assessment of “import substitution” is not worth it, it has always been a bluff. Hopes for an increase in imports from China are more real, but there is no need to increase the ability of the Chinese to replace lost commodity flows. Yes, and just reluctance to engage in risky business. Therefore, another decline in living standards in the coming months is quite obvious.
Vitaly Grankin