Features of modern anti-inflationary policy in the Russian Federation

• Published in: Теоретическая и прикладная экономика no. 1; pp. 35 - 54
• Main Authors: Kovalev, Vladislav Alekseevich, Dorofeev, Mikhail Lvovitch
• Format: Journal Article
• Language: English
• Published: 01.01.2025
• ISSN: 2409-8647; 2409-8647
• DOI: 10.25136/2409-8647.2025.1.73031

The object of the study is the anti-inflationary policy in the Russian Federation. The subject of the study is the parameters of modern anti-inflationary policy. The paper highlights the factors influencing the inflation deviation from the target and the parameters of anti-inflationary policy in Russia. Particular attention is paid to the contribution of fiscal momentum, the labor market situation, autonomous demand, administrative factors, exchange rate shifts, the effectiveness of the transmission mechanism, and coordination of monetary policy with fiscal policy. In the course of the research, the decomposition and dynamics of inflation in Russia and abroad are analyzed. The article evaluates the consequences of lowering the key rate in the current conditions, the possibility of increasing the output potential to a level corresponding to the current high aggregate demand, and the expediency of further pursuing a tight monetary policy. The research uses the following methods: graphical, comparative and coefficient analysis, vertical and horizontal, factor analysis of indicators that determine the problems of anti-inflationary policy. The information base of the study is represented by materials from the Bank of Russia and data from the Federal State Statistics Service. We identified pro- and de-inflationary factors and concluded that the positive output gap, stimulated by fiscal policy, record low unemployment, restrictions on increasing labor productivity and affordable labor, is the driver of high inflation in Russia at the present stage. The transfer of the effect of a number of tax changes to inflation will primarily depend on the further growth rates of government spending, their structure and degree of productivity. Lowering the key rate in the current conditions will worsen inflationary processes and will not allow timely increase in the potential of the Russian economy, which makes it possible to justify the need to continue to pursue a tight monetary policy. Fiscal policy has proved to be insensitive to the current monetary policy and acts significantly opposite to inflation targeting, including due to the preservation of a safe level of public debt and the low cost of servicing it. The growth of aggregate demand and the Russian economy slowed down in the last quarter of 2024, and the achievement of the target by 2026 will be facilitated by the results of recent investments in fixed assets, the absence of external shocks and the implementation of stricter fiscal policy regarding government spending.