elvira nabiullina : current problems in the post - pandemic economic recovery speech by ms elvira nabiullina, governor of the bank of russia, at the plenary session of the federation council meeting, 22 september 2021. * * * good afternoon, ms speaker and colleagues. thank you very much for inviting me to speak today, on the first day of the autumn session. in my speech, i would like to focus on current problems in the post - pandemic economic recovery. undoubtedly, we are pleased about its rapid pace. yet, the economic rebound is bringing some side effects that we must counter to ensure the stability of our economy, the financial system, and ultimately, the well - being of our people. the economy has now returned to the growth path it would have been on but for the pandemic. certainly, central to the successful delivery of anti - pandemic measures have been the government ’ s budget support measures alongside the prompt efforts of lawmakers to set up a legal framework for anti - crisis response measures. in turn, we at the bank of russia have granted regulatory relaxations to banks to support consumers and businesses, and to restructure and issue new loans in this challenging period. our monetary policy has been accommodative. it was only after we made sure that the economic recovery was becoming sustainable that we started to raise the key rate. certainly, i will explain why we are doing this as i know that there are many questions on this subject. unfortunately, all that does not mean that the problems caused by the pandemic are behind us. for example, we can see a strong rise in inflation, both domestically and across the globe : demand has recovered as restrictions and lockdowns have been lifted, while supply - side restrictions persist. companies in many sectors are recording skills shortages, and there are raw material and component supply disruptions. we are monitoring economic developments and the financial situation in the regions on an ongoing basis. at each policy board meeting, our regional executives report on how the situation in the regions is unfolding and provide us with a broad picture. we note a global rise in prices for many goods ( metals, wood, and food ), which are pushing up business costs. prices are increasing in many countries, but regulators view the current surge in inflation as temporary, and are just waiting for the trend to end. there is no way we can afford the same approach. let me explain why.

emphasise that both fiscal and monetary policies play a countercyclical role, that is, they address the issue of overcoming the downturn and bringing the economy back to its potential. this is certainly a top - priority task in the current situation, yet it is critical to remember what is absolutely essential for sustainable long - term development and an increase in economic potential, labour productivity and, accordingly, households ’ incomes. to tackle this task, we need incentives to increase private investments and develop private initiatives and should enhance the flexibility of the labour market, which primarily depends on the business climate and other structural factors. the level of our economic potential after the pandemic and how quickly the economy will regain it are crucial for both our macroeconomic forecast and monetary policy. as you know, this uncertainty of supply - and demand - side factors is a key point in our forecast scenarios. they are presented in the draft monetary policy guidelines for 2021 – 2023 published last week. we are going to update our forecast estimates following the board of directors ’ meeting scheduled for october. yet, our approaches to the set of scenarios and key forecast assumptions in the scenarios will remain unchanged. winding up, i would like to make my traditional comments on monetary policy prospects. the main path of the monetary policy easing has already been passed — since june 2019, the key rate has decreased by 350 basis points, including by 200 basis points this year, to reach its record low. we still see some room for reducing the key rate, but we will consider the necessity to use this room and the time when this should be done. as shown in the monetary policy guidelines, both under the baseline and alternative scenarios, the bank of russia will be capable to tackle the task of maintaining price stability, that is, keeping inflation at our target close to 4 %. 3 / 3 bis central bankers'speeches