US EditionChronic inflation hits Russia as huge pay increases fuel rising prices
5 Articles
5 Articles
While a real war economy has taken place in Russia, citizens are feeling more and more inflation.
While Moscow's army is steadily advancing in Donbass, the basis of Putin's war machine is crumbling away at home: The ruble is smearing up, interest rates are exploding and inflation is galloping. And a new front in the economic war could soon open up.
Chronic inflation hits Russia as huge pay increases fuel rising prices
Inflation has again spiked in Russia in recent months, fuelled by massive public spending on the Ukraine war and big wage increases in many sectors of the economy. To counter this, the Central Bank raised its benchmark interest rate to a record 21 percent at the end of October, a measure that has yet to halt the persistent rise in prices.
“A weaker ruble will be reflected in inflation. And this will make consumption more expensive for Russian citizens. The less you consume, the slower the economy grows. If inflation is higher, the Central Bank will have to tighten monetary policy by raising the rate,” he explains
The ruble is plummeting, companies are groaning under the high key interest rates. The Russian economy suddenly seems very vulnerable.
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