Bank of Russia to start publishing data on price expectations of businesses

The Bank of Russia starts monthly publication of data on price expectations of businesses. The Bank of Russia gathers and analyses this information to get an insight into how real sector companies estimate future price movements, what their reasons behind such estimates are, and whether they believe that inflation will stabilise around 4%. The regulator uses the dynamics of price expectations of businesses to prepare its key rate decisions.

The Bank of Russia, just like other central banks, uses the data on price expectations of businesses, accumulated over many years, to get a better understanding of inflationary processes and inflation specifics as applicable to the Russian economy, as well as to prepare its forecasts.

Earlier, the information on price expectations of businesses was published in the Monetary Policy Report. From now on, this information will be published on a regular basis in the section Monetary Policy / Economic and Financial Market Outlook / Inflation Expectations.

The data is obtained from monthly surveys of companies conducted by the Bank of Russia for over 18 years. Currently, more than 11,000 companies participate in the surveys representing such sectors as manufacturing, agriculture, construction, transportation and storage, wholesale and retail trade. Surveys are conducted in all Russian constituents and cover small, medium and large (including systemically important) regional enterprises.

To assess price expectations, the regulator uses companies’ responses to the question ‘How will finished product prices change over next 3 months?’ (Possible answers are ‘increase’, ‘remain unchanged’ and ‘decrease’). Based on the received information, the Bank of Russia calculates the balance of replies as the difference between the shares of the ‘increase’ and ‘decrease’ replies in per cent to the total of shares of precise replies.

Due to the fact that company surveys contain quite a broad range of information, which allows the regulator to promptly receive alternative assessments of the country’s economic and investment activity, the contents of the published survey data will be expanded in the near future.