Non-food goods and services would increase in price following the New Year holidays, according to experts.
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| [Moscow cityscape,Russia/TimeLabPro] |
Inflation is now hovering around 8%. Clothing, footwear, automobiles, and gadgets are all seeing price increases. All of this occurred in 2021, and customers have already felt the effects of the big price increase on their wallets. However, it is far too early to unwind: prices will not fall after the chimes. Quite the contrary is true. What non-food items and services will see price increases in 2022, and what should be purchased now to save money later, according to Russian media MK?
According to members of a state retail network specialized in the sale of personal communications equipment, prices for smartphones in Russia in 2022 may rise by another 15-17 percent owing to a lack of components, particularly microchips. Prices for cellphones in Russia climbed by 34% on average in 2021. According to market players, processor costs are driving up the cost of electronics. Some new models that will be released in the autumn of 2021 are already 20-30% more expensive than equivalent models from the previous year. This is especially true for low-cost cellphones under 15,000 rubles. What is the cause of the price increase?
"Smartphones are growing more costly for many reasons," says Natalya Milchakova, Deputy Head of IAC Alpari. "In the globe, due to a lack of chips and disruptions in supply, in Russia, due to a shortage of smartphones themselves." This is virtually entirely a market for foreign goods. Imported items are also getting more expensive in Russia, due to supply shortages as well as the poor ruble exchange rate. In 2022, we estimate smartphones will increase in price by another 15-20%. In general, the price of budget smartphones will climb, despite the fact that they lagged behind the mainstream and luxury models in price growth in 2021. Consumers will purchase hairstyles in any scenario, because it is difficult to give up cellphones in today's environment.
"The main manufacturers were forced to postpone the dates of presentations and introduction of new models owing to a scarcity of materials for manufacturing and issues with the delivery of phones to stores," says Alexey Krichevsky of the Academy of Finance and Investment Management. As a result, prices for all models began to rise - if a top-end smartphone previously cost up to 110 thousand rubles, the updated version now costs 130-140 thousand rubles, and this, in particular, is to blame for the ruble depreciation, which was not reflected in prices last year but began to hit the pocket this year.
Clothes and shoes will not be affordable
Fashion Consulting Group expects that clothing and shoe prices would rise another 15-25 percent in 2022. Some goods may see a higher price increase. Due to a rise in the price of raw materials twice a year, shoes manufactured of EVA (a waterproof substance used to make boots and galoshes) might increase in price by 20-30%. The most significant increase in apparel and footwear costs is projected in the luxury class - up to 30-40%, on average 20-25%.
"Prices for clothing and footwear are rising due to disruptions in supply, higher raw material prices, higher costs of Russian manufacturers when it comes to our products, and, most importantly, the dependence of almost the entire domestic industry on imports and, as a result, on inflation, which we "import" along with goods, as well as the ruble's weakness," says Natalia Milchakova. The price increase in this category might range from 10% to 30% next year for various product groupings, with the budget segment bearing the brunt of inflation. I do not believe that the general public would refuse to purchase clothing and footwear. Rich individuals will not cut back on their consumption; instead, someone will stop buying new shoes every month. The middle class, on the other hand, will have to tighten their belts and consider other methods to save money. Someone will pay in installments, someone will pay with a credit card, and someone will take out a microloan (although a microloan to buy a new suit, shoes or dress can then be very expensive). Someone will save up for a necessary purchase by deferring a certain percentage of their salary, and someone will postpone the purchase of clothes or shoes for the following year or will buy domestic clothes and shoes instead of imported ones that have become much more expensive, for example, in inexpensive online stores."
Cars for the rich
According to the vice-president of a Russian vehicle manufacturer, starting in the new year, we may expect a hike in car costs due to the "explosive spike" in steel prices following the removal of export tariffs. Steel prices have risen by 4-11 percent since the beginning of November compared to October, but metal taxes, which have been in place since August of this year, have protected Russian motorists from a dramatic price hike. However, because this system is only in effect until the end of the year, automobile prices in Russia will begin to "catch up" with worldwide pricing in January.
"High metal prices, disruptions in the supply of components, increasing expenses of Russian manufacturers, high cost of transportation of materials and completed goods are the causes for the rise in automobile prices," Natalia Milchakova says. Car prices are expected to climb in a broad range in 2022, according to predictions, from 5% to 20% by 2021. The least costly executive automobiles will likely increase in price, while the budget category will likely increase the most. Some consumers who can't afford a new automobile will turn down a personal vehicle, especially as gas prices continue to rise, not to mention the costs of paid parking areas, upkeep, and so on. Those who are unable to give up their cars will most likely seek assistance from banks and take out loans - there are many such options available presently."
Residents' wallets will be emptied by housing and communal services
Tariffs for housing and common services were authorized by the government for 2022. Depending on the location, bill amounts will increase by 2.9-6.5 percent. Yes, indexation will be lower than inflation, which by the end of 2021 is estimated to be in the range of 7.4-7.9%. Nonetheless, the amount of the rent in most places will increase more than in past years. Furthermore, many housing and community services firms have absolutely no cash left over for communal infrastructure modernisation.
Comments Natalia Chernysheva, director of the People's Control Organization and an expert in the field of housing and community services: "At the very least, the fact that utility rates have stayed connected to inflation is a good." However, there is little reason to expect this to continue in the future. The inflation rate is anticipated to be greater than it is today by the time the yearly hike in housing and communal services rates occurs in July. The issue is also because tariff increase is based on the regional average, which ignores the fact that tariffs might be much higher in some areas. Furthermore, there are housing services in bills that do not required to be adjusted for inflation, such as payments for repairs and upkeep of a home, which might also rise. Many management organizations may try to boost housing service fees, and residents should keep an eye on this and prevent this from happening at the general meeting of owners."
Internet and telephone are already expensive
Tariffs for cellular phones and mobile Internet might soar as early as next year. The cost of home Internet, television, and other wired communication services will all climb. The TelecomDaily news agency revealed this prediction, citing key operators' executives. Currently, the majority of the managers polled are willing to raise service fees. Furthermore, 48% predicted that growth will be ten percent or higher. What should the customer expect?
Artem Deev, the leader of AMarkets' analytical section, had the following to say: "Earlier this year, it was announced that mobile operator charges may increase by 10-15% in 2022. This is due to a number of factors. First, the pandemic is still having an impact: a scarcity of equipment because to a global shortage of chips lengthens delivery times, increasing company expenses. Second, the cost of delivering various components required by operators and providers to maintain required communication quality and install new signal receiving equipment has grown by several times. Third, the cost of the equipment has increased, and recent Russian legislative constraints (the infamous "Yarovaya package") have resulted in a rise in mobile operator expenses. As a result, customers are unlikely to abandon the Internet, as doing so would be nearly impossible in today's atmosphere. Everyone need a network to communicate with family and friends, to work, to make payments, and so on. Citizens will most likely pick lower rates, resulting in a fall in the percentage of expensive tariffs consumed by mobile carriers and an increase in the share of the cheapest tariffs consumed.