Deflation beyond the threshold: why prices may slow down sharply
Inflation in Russia is gradually starting to slow down. Projections of current data for the whole of 2025 already give figures below 8%. At the same time, several factors can lead to the fact that in the next few months the price increase will stop almost completely. The reason is due to overstocking in the markets, a sharp deterioration in credit conditions, and a sharp drop in the dollar. About the prerequisites for possible deflation in Russia — in the material of Izvestia.
Those are still shots
In February 2025, annual inflation in the country exceeded 10%, being awarded the title of "galloping" for the first time. According to the forecasts of the Bank of Russia at the end of last year, the Russian economy will reach the peak of inflation by April or May.
However, in the first half of March, it turned out that price growth was slowing down quite intensively. In the week from March 4 to March 10, the consumer price index was 0.11%, and on March 11-17 it was even 0.06%. Despite the fact that in winter, the usual situation was an increase of 0.2–0.3% per week. Inflation remains above 10% year-on-year, but the low base effect plays a key role here. If we consider the projection of current weekly figures for the year with seasonal smoothing (saar), then price growth is already falling below 6% — a rather sharp slowdown, and there is reason to believe that this is not the end yet.
The first prerequisite for this was the change in the labor market. In 2024, it was tough for the employer, and this factor was cited as a key cause of inflation. Unemployment has reached a historic low (in fact, we had full employment within five minutes), and the shortage of personnel affected most sectors of the economy. Gradually, by the end of the year, the situation began to improve.
And in 2025, we cannot seriously talk about any deficit. According to HeadHunter, there were 5.1 applicants per vacancy in February. For comparison, in the summer of 2024, this figure was 3.1. Indicators from 4 to 8 indicate that the labor market is balanced, there is no shortage or excessive competition for jobs. The lack of competition for candidates should quickly lead to a cooling of wage growth, which will be a very disinflationary factor.
No discounts, no sales
The second prerequisite was the clear signs of overstocking that appeared in many markets at once. For example, a drop in demand for apartments in new buildings was noted at the end of January. In some markets, in the Moscow region and the Krasnodar Territory, about half of the apartments are unsold. The abolition of preferential mortgages has become a serious blow to developers who have been building housing for years with a focus on the demand created by this scheme. A decrease in sales, compared with the figures of a year ago, is recorded in all regions. In these circumstances, supporting falling demand through discounts remains the only option for the development of events in the near future — unless, of course, the preferential mortgage is returned, and this is extremely doubtful.
The third prerequisite was the proposals of the Central Bank to document income for any loans in the amount of more than 200 thousand rubles. This will very quickly cut off a large number of potential buyers (mainly representatives of small businesses or those receiving low incomes).
But in the rental market, prices have already started to fall, and for quite some time. According to Dom.Russia", the average rental price of an apartment in Moscow and St. Petersburg fell by 3%, and in other major cities — by 1%. At the same time, the number of ads continued to grow and reached a total of 97 thousand. This is more than twice as much as in September. The reason for the price drop was also the coincidence of several factors, from population decline to the purchase of apartments and houses by those who had previously rented housing. In addition, there was a saturation of apartments, which for many months were put on the market specifically for the purpose of renting.
The problem of overstocking is not limited to real estate. The situation is similar in the car market. The volume of car loans has been falling for five months in a row. The year-on-year decline in February 2025 was 53.3%. All of this immediately led to an accumulation of reserves. In January, 800,000 cars accumulated in dealer parking lots, which is a very significant figure in Russia. Dealers themselves admit that there are currently no other options to implement this array, except through marketing and price reduction.
The decline in consumer and corporate loans has also led to a drop in sales of electronics and household appliances. In rubles, the figures increased slightly at the beginning of the year compared to the figures for the same period in 2024, but there is no growth in physical terms. As a result, many wholesalers have suspended purchases of machinery. Coupled with the likely slowdown in household income growth, the market may be depressed for a long time. In addition, falling inflation rates can in themselves provoke citizens to abandon the purchase of electronics, which for many is still a kind of insurance against rising prices.
The ruble puts pressure on prices
The current situation shows that the ultra-high real rate and strict macroprudential measures work quite well. However, now another factor has emerged that should have an impact on the market with some lag. It's about the exchange rate. Since the beginning of March, the dollar exchange rate on the interbank market has fallen by almost 10%, approaching a minimum of 81 rubles per dollar. After that, it bounced back a bit and is near the 85 rubles mark. This is a serious exit beyond the range of 90-100 rubles per dollar, in which the Russian currency seems to have stabilized. A similar picture is emerging for the yuan, where a drawdown of almost 10% is recorded.
There is nothing surprising here. The sanctions have not yet been able to dramatically worsen the export situation, but they still create known problems for importers. The balance of payments is showing very good indicators, and this week the customs announced that earlier (October 2024 - March 2025) it had missed about $17 billion in exports and only $3 billion in imports, which puts even more downward pressure on the dollar. Finally, the recovery in the Russian stock market, and especially in bonds, has shown that capital has flowed into the country amid good geopolitical news. Therefore, 85 per dollar may not be the limit.
Naturally, such a strengthening of the ruble becomes an additional force that slows down inflation. As before, a huge part of the domestic commodity market is provided by imports. Even if the companies importing the goods will not lower prices in accordance with exchange rate fluctuations, they will at least not rush to raise them. Over the next few months, the exchange rate is another powerful disinflationary factor.
All this creates a very strong "cocktail" that will put a lot of pressure on lower prices. It is possible that deflation will be noticed as early as one of the spring months. The flip side of the coin is a sharp slowdown in the economy, which is already evident in business activity figures. This combination allows us to assume that as early as April, the Central Bank will begin to reduce the rate, and quickly.
Переведено сервисом «Яндекс Переводчик»
