The number of vacant jobs is significantly higher than two years ago, specifically by about a third. Many industries are facing a shortage of workers, including both specialists and low-skilled workers. Speaking of the inflow of labour migrants, it has already returned to the pre-pandemic level, according to recent data. However, as the demand in the industries with a large portion of labour migrants (in courier services and construction) has surged over this period, companies still experience a deficit of labour migrants. Consequently, the rise in the demand for labour in various groups of employees is translating into the steady increase in nominal wages. In the course of the discussions preceding our today’s decision, several executives of our regional branches stressed that increasingly more companies were forced to raise wages at a double digit pace to be able to retain their employees. The staff shortage is a factor limiting enterprises’ capacities to expand output. It is hard for them to catch up with growing demand. This suggests that proinflationary risks brought about by labour market gaps are strengthening. Monetary conditions continue adjusting to our earlier decisions on the key rate. After the meeting in October, nominal interest rates, including on federal government bonds, deposits, and loans, continued to go up. Yields on federal government bonds rose over the entire curve. The growth of short-term yields has been mostly driven by the increase in the key rate and the updated forecast of its further path, whereas long-term yields are largely influenced by the escalation of geopolitical tensions.

All these factors might be the reason for a slower exhaustion of temporary factors and a slower reduction in inflation than assumed in the baseline scenario. Speaking of demand, accommodative monetary conditions existing in the global economy since the outbreak of the pandemic might remain for a longer period, despite the growing trend towards monetary policy normalisation in advanced economies. In the long run, monetary policy tightening in advanced economies will certainly have disinflationary impact. However, in the short run, global inflation may stay high longer, given the time lags of monetary policy. A faster monetary policy normalisation in advanced economies might provoke additional shortterm proinflationary effects for emerging market economies. Thus, a reversal of capital flows might increase exchange rate fluctuations and overall volatility in the financial markets of emerging market economies. For Russia, rising geopolitical tension is another risk of a temporary intensification of volatility. As regards disinflationary risks, we believe that they have a weaker effect and are primarily associated with supply-side factors. As I have already said, our forecast assumes that some disinflationary factors will materialise next year. These include a partial restoration of production and logistics chains, an expansion of food supply in global markets, and generally a certain adjustment of prices in global commodity markets down from the currently high levels. If this adjustment is more significant, the disinflationary effect will be stronger than predicted in the baseline scenario. I will now speak about our future decisions.