Why counter-sanctions against the United States will raise prices in the Russian shops

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Russian retaliatory measures generated in the format of counter-sanctions against the United States, can raise prices in the domestic retail market of the Russian Federation. It will pull up inflation and hit consumer mood was stabilized Russians. In addition, come to a relative balance of the retail sector, balanced supply across product lines, may once again be in a vulnerable position.
But as usual, politics over the economy, and in making such decisions the government standard is guided by political priorities.
Representatives of major retail chains of Russia, included in the akort Association of retail companies – has said that the draft counter-sanctions will force stores to raise selling prices due to rising costs. Among third-party administration costs of the retailers indicate the need for careful internal control, insurance and risk management, the likelihood of fines. In the HSE included Magnit, Auchan, X5 Retail Group, from “roundabout” to “Crossroads” and others.
Why prices will go up? Due to the adopted on the eve of the third, final reading the law on sanctions against the United States, Russian authorities may introduce restrictions or prohibitions on the importation of goods, products or raw materials those organizations that are somehow subject to the legislative framework. An exception to this law is, it applies to medicines, and this amendment came only after the popular protests. Under the contents of the law on counter-sanctions, in theory, can “fit” anything and everything is convenient at the moment.
If he would act in this format, prices in networks of retailers do rise up “just in case”. It will be enough for the restrictive measures in respect of any of the suppliers of raw materials for food production or directly for the products themselves.
According to official forecasts, inflation in Russia by the end of the year will accelerate to 4%, but if retail prices go up, it may be higher – about 4.2 to 4.5%.
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Anna Bodrova,
Senior analyst,
Alpari