Since the beginning of the year, potatoes in Russia have increased by 81%, onions – by 40%, cabbage – by 34%, milk, sour cream and apples – by 17%.
Over the past week, the consumer price index in Russia rose by 0.5%, and annual inflation accelerated to 9.07, the highest since February 2023. The Moscow Times reported this on Wednesday, December 4, citing the data of Rosstat.
It is noted that the weekly inflation surge is one of the strongest in the last two years: prices rose only in the first week of July (by 0.77%), when the authorities sharply indexed tariffs.
Monthly inflation in November compared to October was 1.5% – and this is the highest value for this month in the past 10 years, said Egor Susin, managing director of GPB Private Banking. In terms of annual rates, this puts inflation at 14.5%, he estimated.
“The inflation picture is a complete disaster,” the publication quoted MMI analysts as saying. The epicenter of the inflation fire remains the grocery departments of supermarkets, where prices have risen by tens of percent and continue to rise. According to Rosstat, potatoes have increased by 81% since the beginning of the year, onions by 40%, cabbage by 34%, milk, sour cream and apples by 17%. The increase in prices for butter, a record since 2007, accelerated to 33%, for lamb – up to 22%, for bread – exceeded 13%.
The collapse of the ruble inevitably involves an increase in the cost of imported goods and products, with a large share of imported components, warns Natalya Milchakova, leading analyst at Freedom Finance. Clothes and footwear, smartphones, consumer electronics, as well as food products – vegetables, fruits, confectionery, juices and semi-finished products – will increase in price.
“To stop the inflationary spiral, a shock” from monetary policy may be needed, MMI analysts wrote. The Central Bank may raise the key rate to 25% – the level at which Vladimir Putin began his first presidential term in 2000, Bloomberg Economics economist Alexander Isakov does not rule out.
“The central bank is faced with a dilemma,” he explained “Either raising rates higher, which risks economic recession, or simply accept higher inflation pressure.” The Central Bank, according to Isakov, will choose the first.
Having increased the rate eight times in a row, the regulator brought it to 21% – the maximum in the last 20 years. But inflation has not yet begun to slow down and this year is “higher” than last, Central Bank head Elvira Nabiullina admitted on Wednesday.
Inflation is accelerated by the “state of the labor market,” where a record shortage of personnel has appeared in history, as well as sanctions affecting “restrictions on imports and the supply of goods,” Nabiullina is listed. Economists polled by Reuters predict that at the December meeting the Central Bank rate may rise to 23%, and participants in the interbank money market expect its further growth to 25% in February.
In the past, ISW analysts predicted that the Russian economy will face big problems in 2025.
Russia is on the brink of an economic crisis
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Source: korrespondent
I am David Wyatt, a professional writer and journalist for Buna Times. I specialize in the world section of news coverage, where I bring to light stories and issues that affect us globally. As a graduate of Journalism, I have always had the passion to spread knowledge through writing.