The price index and deflator index are special economic indicators that allow us to predict what the real cost of works, goods or services will be in future periods.
What is expected in 2022
It is necessary to distinguish between the index and the coefficient of deflation. In accordance with the provisions of the Tax Code of the Russian Federation, the deflator coefficient is a coefficient that reflects the change in consumer prices for goods, works and services when recalculating the current value into constant prices. It takes into account changes in consumer prices of the past period in the current moment.
The government issued a draft order on the establishment of coefficients for the next year. In 2021, use the following deflators:
- Personal income tax - 1.864 (Chapter 23 of the Tax Code of the Russian Federation);
- USN - 1.032 (Chapter 26.2 of the Tax Code of the Russian Federation);
- UTII - 2.065 (Chapter 26.3 of the Tax Code of the Russian Federation);
- PSN - 1.637 (Chapter 26.5 of the Tax Code of the Russian Federation);
- trade fee - 1,420 (Chapter 33 of the Tax Code of the Russian Federation).
Deflators affect the final price of goods, works and services. Use the new indices and their industry values when preparing forecasts and planning procurement for 2021 - this is a fragment of an article from the State Contract portal. Read the full version:
Deflator indices for 2022 determined
The Ministry of Economic Development of Russia, in a letter dated September 30, 2020 No. 32028-PK / D03, provides indicators for the forecast of the socio-economic development of the Russian Federation until 2023, used for pricing purposes for products supplied under the state defense order, in accordance with the order of the Ministry of Economic Development of Russia dated April 1, 2020 No. 190.
The forecast for 2022 and for the planning period of 2023 was approved at a meeting of the government of the Russian Federation on September 16, 2020 (Minutes No. 35, Part I). Some of the approved deflator indices are:
What is a deflator index
The level of prices for food and essential goods is of interest to almost all residents of Russia. What will be the price tags in stores in the new year - this question is asked by everyone: from young to old. To have at least some idea of the cost of goods, works, services, officials apply a special calculation coefficient.
The deflator index is the basis for determining the dynamics of price indicators in the future. That is, by applying the approved deflator index for 2022 (by the Ministry of Economic Development) to the current price tag, it is easy to calculate the cost of a specific product category or product in the planning period.
Why is this needed? The calculated deflator index is used not only to predict the value of goods and services. Also, the deflator index helps to assess the real income level of the population. That is, to determine how many products, goods, services a citizen with a certain level of income will be able to purchase.
By analyzing the level of pricing and the paying capacity of the population, officials determine the directions of social policy. This is necessary to support socially unprotected categories of citizens. In other words, officials define a set of measures aimed at financially supporting poor Russians living below the poverty line.
Despite the importance of the calculated coefficients, their use has a significant drawback. When calculating future prices, the inflation rate is significantly underestimated. And this negatively affects the determination of the real level of income of the population of the country.
Applications
Then the officials determine what the prices will be in future periods. Having received the value positions, the income level of the population is estimated. Moreover, the analysis is carried out for each category of citizens separately. The calculations are carried out taking into account the needs of the adult working-age population, minors in Russia and, of course, pensioners.
These indicators make it possible to forecast the need for indexation of benefits, pension payments and other social benefits. All operations are carried out taking into account the deflator index - annual indexation of benefits at the expense of the Social Insurance Fund (usually carried out in January-February), indexation of pensions, increase in the value of pension points, increase in social benefits, additional payments and allowances.
Note that social policy is not the only area of application of the coefficients. For example, the deflator index for 2022 in construction allows us to determine the price indicators for building materials, services and works. But this is just the tip of the iceberg. The cost of finished housing and other real estate ultimately depends on these calculations.
The deflator index for 2022 has a similar meaning for estimates. This coefficient makes it possible to predict the level of public procurement, to determine the need and solvency of Russian organizations in the planning period. For example, a company, when planning the procurement of goods, works, services, is obliged to take into account not only the brought volumes of financing and its needs, but also the dynamics of prices for the necessary goods, works, services.
Note that none of the spheres of government activity can do without the use of deflator indices. Even the tax system contains calculations based on the application of these coefficients.
Scenarios and calculations
The Ministry of Economic Development is obliged to calculate and approve deflator indices for the forecast periods. Moreover, the values are determined for each reporting period separately, and the forecasting of the coefficients is carried out by officials taking into account external and internal factors. Depending on how each of the factors will affect the overall state of the economy, several development options are determined.
In simple words, the forecast deflator indices of the Ministry of Economic Development until 2023 are approved according to the scenarios. What is it for? Let's show with an example.
It is no secret that a number of countries have imposed restrictive sanctions against the Russian Federation. The level of prices for raw materials (especially oil products) has a negative trend. The level of customs duties and taxes is growing. And officials, when determining deflator indices for 2020-2023, take these factors into account. They develop three scenarios at once:
- Basic, in which all external and internal factors will retain their current values. In simple words, the sanctions will remain, oil prices will fluctuate around $ 40-50 per barrel, and customs duties will be frozen at the level of 2018-2022.
- Favorable forecast, in which a positive development trend is expected. For example, sanctions will be relaxed or completely lifted. Prices for oil products will rise, while customs duties on Russian goods will be cut.
- Target scenario. This type of forecast is the most unfavorable. Provides for the most negative influences of external and internal factors on the Russian economy. For example, sanctions will be toughened, the cost of oil will fall to critical positions, customs duties will increase significantly, the rate of inflation and unemployment within the country will rise.
Consequently, the deflator index for 2020-2022 by the Ministry of Economic Development is not only a coefficient for calculating price dynamics in the future, but also an important indicator of the development of the Russian economy, taking into account the influence of external and internal factors.
How to count
The calculation of the indicator is the ratio of the nominal values to the current ones. Moreover, the resulting indicator is converted into percentages. Let's see how the deflator index is used for 2021 (the order of the Ministry of Economic Development determines the formula):
ID = nominal values / current (real) values × 100%.
For example, how the GDP deflator index is calculated:
ID GDP = nominal GDP / real GDP × 100%.
This indicator is generalized.It characterizes the dynamics of prices for all goods, works, services for both consumer and industrial purposes, since GDP is the estimated cost of everything that was produced in the billing period. But the indicator of the GDP deflator index speaks of the dynamics of prices in the Russian economy as a whole.
Forecast values
In order to apply taxation norms, the deflator coefficients of the Ministry of Economic Development for 2021 were approved by Order No. 720 dated October 30, 2020. Based on these indicators, the limits on insurance premiums are indexed annually. The limit for the transition to the simplified tax system is indexed in a similar way, but officials froze it in order to support business.
For the forecast period, officials have already fixed the indicators in the forecast of the socio-economic development of the Russian Federation for the period up to 2024. Using the explanations from the letter of the Ministry of Economic Development of Russia dated 03.10.2018 No. 28438-AT / D03i, we get the following deflator index for 2021 (Ministry of Economic Development):
- construction - 105.1;
- oil - 103.6;
- water supply and sewerage - 104.0;
- gas supply, electricity supply - 104.2;
- consumer price index - 103.8;
- agriculture - 103.3.
Note that these indicators are given for the baseline scenario of economic development and are relevant while maintaining the current values of internal and external factors.
