Russians expect better living standards next year

A survey by the inFOM, conducted for the Bank of Russia in December, shows that inflation expectations have declined while estimates of the next year’s individual welfare have gone up.

The respondents were more upbeat about future development of the country and changes in their material wealth, expecting increased output and better quality of life next year together with lower unemployment and less corruption.

December’s incentives for major purchases were higher despite increased propensity to save: the respondents did not want to miss pre-New Year discounts and sales.

Inflation expectations experienced a slowdown in December and over the year, but this slowdown was not in line with the decline of actual inflation. The inertia of inflation expectation lies at the heart of the moderately tight monetary policy.

The year-end saw a seasonal pickup in concern about prices of fruits and vegetables, housing services and utilities and healthcare. However, the respondents expressed less concern about prices of grains, pasta, tea and coffee.