On Sunday, May 29, 2022 at 2:08:30 AM UTC+8, David P. wrote:
> Russian Inflation Makes U.S. Price Rises Look Tame
> By Hannon, Chernova & Kantchev, May 20, 2022, WSJ
>
> Sanctions are hitting Russian families at the grocery store as food prices rise amid surging inflation, which is already running at double the rate of the West.
>
> Consumers are falling further behind as wages stagnate in a slowing economy. The situation is expected to get worse as inventories run down, sanctions take effect and buyers adopt strategies that could push inflation higher..
>
> Sugar costs two-thirds more than a year ago, while fruit and vegetables cost one-third more, according to government data. Overall, food prices are up by one-fifth, double the increase recorded in the U.S. in April. Pasta costs almost 30% more than it did a year ago, while prices of cereals and beans are up 35%, the data shows.
>
> The impact is harsher on Russian families because a larger share of their household budgets goes to food. According to the U.S. Department of Agriculture, food accounted for nearly 29% of the average Russian household’s spending in 2020, compared with 7.1% in the U.S. and 9.4% in the U.K.
>
> Wages for Russian workers aren’t keeping pace. The result is that real disposable incomes were 1.2% lower in the first three months of 2022 than a year earlier. With the economy set to contract by around 10% this year, pay increases are unlikely to pick up.
>
> Gregory Shevchenko, co-founder of digital marketing agency Shevchenko.bz in Moscow, said that he expects his employees to start asking for higher pay due to inflation, which he is unlikely to be able to accommodate.
>
> “I used to hire and pay salaries based on expected growth,” Mr. Shevchenko said. But clients have decreased their budgets, paused new contracts or shortened deals, he said.
>
> “The scariest part in business today is that project development is on pause,” Mr. Shevchenko added.
>
> Overall, the prices Russian households pay for the goods and services they consume were 17.8% higher in April than a year earlier, compared with annual inflation rates of 8.3% in the U.S. and 7.4% in the eurozone.
>
> Inflation has stayed high since an initial surge after Russia invaded Ukraine in February, which set off a wave of economic sanctions. Detergents and cleaning products cost 30% more than in April 2021, while electrical goods and household appliances are 28% more expensive. Russia’s huge oil and gas production means that gasoline prices rose by just 6%.
>
> Russian consumers now monitor Telegram channels for discounts on everything from cosmetics to pizza deliveries. The Federal Antimonopoly Service has received appeals from Russians about the rising prices of various products and has conducted checks on sugar, plastics and baby-food sellers.
>
> Inflation, which has long been an issue in Russia, is likely to stay high as inventories of imported goods dry up, prices for scarce parts increase, transportation costs rise and Western sanctions begin to take effect.
>
> “Many companies still have Western parts and goods in stock. Some will last a few months, some may last a year. But the stocks will run out eventually, and scarcity will drive up prices,” said Janis Kluge, a specialist in the Russian economy at the German Institute for International and Security Affairs.
>
> Expectations of rising prices reached the highest level on record, according to a Russian central bank survey of more than 13,000 businesses in April. Planting costs for farmers will rise by between 20% and 40%, according to the survey.
>
> The central bank has said that inflation, economic uncertainty and worsening consumer-credit terms are leading consumers to save more and reduce spending. It said that in the short-term, prices would remain volatile, due to changing dynamics in consumer demand and the availability of products.
>
> The central bank said it was taking measures to curb inflation and expects price rises to decrease to 5% to 7% next year, and 4% in 2024.
>
> Russians have revived old strategies to deal with surging prices and economic uncertainty. One, which is common in countries with high inflation, is to spend money quickly before it loses value. That can push prices higher still.
>
> “Everyone is scared to be left with cash on hand,” said Alla Shinkevich, chief executive of Nevskiy Prostor, a real-estate agency in St. Petersburg.
>
> Instead of selling an apartment and then searching for another one, sellers are lining up the next property and pushing the cash straight into the new transaction.
>
> Ms. Shinkevich has constructed complicated deals involving four or five interconnected property sales. The biggest challenge is finding the last link in the chain, which is the person willing to take the cash, she said. That is still fewer than at the peak of such deal-making in the years following Russia’s 1998 financial crisis. Back then, real-estate chains could go up to 15 properties, according to Ms. Shinkevich.
>
> Inflation is a potent political issue in Russia, but support for President Vladimir Putin appears to have risen since the invasion of Ukraine.
>
> “It is too early to say when and how fast the bad economic situation can erode Putin’s rating, but it definitely will as soon as the consolidation around the flag fizzles out,” said Tatiana Stanovaya, founder of R. Politik, an independent consulting firm.
>
> https://www.wsj.com/articles/russian-inflation-makes-u-s-price-rises-look-tame-11653047287

This year alone, US retail gasoline risen by 24% while Russia rises only 6%.. It is supply and demand situation that the retail gasoline price in Russia is not much for it.

Russia has natural gas to meet the the electricity needs. Russia also has enough of domestic produces and products for its own population. Seriously, import or not is not critical to them as they considered imports as a luxury to them. Russians are used to their own daily "bread and butter" needs and production.

Some years ago, when Russia was sanctioned by US, the Russian farmers were happy to say that they were busy producing cheese and milk from the dairy farms. They told BBC in the interview that they never had so much business production at all when they were facing competitions from imported cheeses from EU like France and so elsewhere.

In the interview by BBC, they said they never been so busy in full production and so profitable before when imports took away much of their sole competition in the country until sanctions gave them a big surge in production and profits in Russia. In short, this goes to say that country with big domestic supply and production will not be afraid of economic sanctions.

On Tuesday, May 31, 2022 at 2:14:56 PM UTC+8, David P. wrote:
> stoney wrote:
> > David P. wrote:
> > > Russian Inflation Makes U.S. Price Rises Look Tame
> > > By Hannon, Chernova & Kantchev, May 20, 2022, WSJ
> > >
> > > Sanctions are hitting Russian families at the grocery store as food prices rise amid surging inflation, which is already running at double the rate of the West.
> > >
> > > Consumers are falling further behind as wages stagnate in a slowing economy. The situation is expected to get worse as inventories run down, sanctions take effect and buyers adopt strategies that could push inflation higher.
> > >
> > > Sugar costs two-thirds more than a year ago, while fruit and vegetables cost one-third more, according to government data. Overall, food prices are up by one-fifth, double the increase recorded in the U.S. in April. Pasta costs almost 30% more than it did a year ago, while prices of cereals and beans are up 35%, the data shows.
> > >
> > > The impact is harsher on Russian families because a larger share of their household budgets goes to food. According to the U.S. Department of Agriculture, food accounted for nearly 29% of the average Russian household’s spending in 2020, compared with 7.1% in the U.S. and 9.4% in the U.K.
> > >
> > > Wages for Russian workers aren’t keeping pace. The result is that real disposable incomes were 1.2% lower in the first three months of 2022 than a year earlier. With the economy set to contract by around 10% this year, pay increases are unlikely to pick up.
> > >
> > > Gregory Shevchenko, co-founder of digital marketing agency Shevchenko..bz in Moscow, said that he expects his employees to start asking for higher pay due to inflation, which he is unlikely to be able to accommodate.
> > >
> > > “I used to hire and pay salaries based on expected growth,” Mr. Shevchenko said. But clients have decreased their budgets, paused new contracts or shortened deals, he said.
> > >
> > > “The scariest part in business today is that project development is on pause,” Mr. Shevchenko added.
> > >
> > > Overall, the prices Russian households pay for the goods and services they consume were 17.8% higher in April than a year earlier, compared with annual inflation rates of 8.3% in the U.S. and 7.4% in the eurozone.
> > >
> > > Inflation has stayed high since an initial surge after Russia invaded Ukraine in February, which set off a wave of economic sanctions. Detergents and cleaning products cost 30% more than in April 2021, while electrical goods and household appliances are 28% more expensive. Russia’s huge oil and gas production means that gasoline prices rose by just 6%.
> > >
> > > Russian consumers now monitor Telegram channels for discounts on everything from cosmetics to pizza deliveries. The Federal Antimonopoly Service has received appeals from Russians about the rising prices of various products and has conducted checks on sugar, plastics and baby-food sellers.
> > >
> > > Inflation, which has long been an issue in Russia, is likely to stay high as inventories of imported goods dry up, prices for scarce parts increase, transportation costs rise and Western sanctions begin to take effect.
> > >
> > > “Many companies still have Western parts and goods in stock. Some will last a few months, some may last a year. But the stocks will run out eventually, and scarcity will drive up prices,” said Janis Kluge, a specialist in the Russian economy at the German Institute for International and Security Affairs.
> > >
> > > Expectations of rising prices reached the highest level on record, according to a Russian central bank survey of more than 13,000 businesses in April. Planting costs for farmers will rise by between 20% and 40%, according to the survey.
> > >
> > > The central bank has said that inflation, economic uncertainty and worsening consumer-credit terms are leading consumers to save more and reduce spending. It said that in the short-term, prices would remain volatile, due to changing dynamics in consumer demand and the availability of products.
> > >
> > > The central bank said it was taking measures to curb inflation and expects price rises to decrease to 5% to 7% next year, and 4% in 2024.
> > >
> > > Russians have revived old strategies to deal with surging prices and economic uncertainty. One, which is common in countries with high inflation, is to spend money quickly before it loses value. That can push prices higher still.
> > >
> > > “Everyone is scared to be left with cash on hand,” said Alla Shinkevich, chief executive of Nevskiy Prostor, a real-estate agency in St. Petersburg.
> > >
> > > Instead of selling an apartment and then searching for another one, sellers are lining up the next property and pushing the cash straight into the new transaction.
> > >
> > > Ms. Shinkevich has constructed complicated deals involving four or five interconnected property sales. The biggest challenge is finding the last link in the chain, which is the person willing to take the cash, she said. That is still fewer than at the peak of such deal-making in the years following Russia’s 1998 financial crisis. Back then, real-estate chains could go up to 15 properties, according to Ms. Shinkevich.
> > >
> > > Inflation is a potent political issue in Russia, but support for President Vladimir Putin appears to have risen since the invasion of Ukraine.
> > >
> > > “It is too early to say when and how fast the bad economic situation can erode Putin’s rating, but it definitely will as soon as the consolidation around the flag fizzles out,” said Tatiana Stanovaya, founder of R. Politik, an independent consulting firm.
> > >
> > > https://www.wsj.com/articles/russian-inflation-makes-u-s-price-rises-look-tame-11653047287
> > This year alone, US retail gasoline risen by 24% while Russia rises only 6%. It is supply and demand situation that the retail gasoline price in Russia is not much for it.
> >
> > Russia has natural gas to meet the the electricity needs. Russia also has enough of domestic produces and products for its own population. Seriously, import or not is not critical to them as they considered imports as a luxury to them. Russians are used to their own daily "bread and butter" needs and production.
> >
> > Some years ago, when Russia was sanctioned by US, the Russian farmers were happy to say that they were busy producing cheese and milk from the dairy farms. They told BBC in the interview that they never had so much business production at all when they were facing competitions from imported cheeses from EU like France and so elsewhere.
> >
> > In the interview by BBC, they said they never been so busy in full production and so profitable before when imports took away much of their sole competition in the country until sanctions gave them a big surge in production and profits in Russia. In short, this goes to say that country with big domestic supply and production will not be afraid of economic sanctions.
> ---------------------
> The Russian economy is volatile. Since 1989 its institutional
> environment was transformed from a socialist command economy to a
> capitalistic market system. Its industrial structure dramatically
> shifted away from heavy investment in manufacturing and agriculture
> toward market services, oil, gas, and mining. Richard Connolly
> argues that for the last four centuries, there are four main
> characteristics of the Russian economy that have shaped the system
> and persisted despite the political upheavals. First of all the
> weakness of the legal system means that impartial courts do not rule
> and contracts are problematic. Second is the underdevelopment of
> modern economic activities, with very basic peasant agriculture
> dominant into the 1930s. Third is technological underdevelopment,
> eased somewhat by borrowing from the West in the 1920s. And fourth
> lower living standards compared to Western Europe and North America.
>
> Russia was the lowest rated European country in Transparency Int'l's
> Corruption Perceptions Index for 2020; ranking 129th out of 180
> countries. Corruption is perceived as a significant problem in Russia,
> impacting various aspects of life, including the economy, business,
> public administration, law enforcement, healthcare, and education.
> The phenomenon of corruption is strongly established in the historical
> model of public governance in Russia and attributed to general weakness
> of rule of law in Russia. As of 2020, the percentage of business owners
> who distrust law enforcement agencies rose to 70% (from 45% in 2017);
> 75% don't believe in impartiality of courts and 79% do not believe
> that legal institutions protect them from abuse of law such as
> racketeering or arrest on dubious grounds.
>
> https://en.wikipedia.org/wiki/Economy_of_Russia
> --
> --