Russian President Vladimir Putin attends an annual televised phone-in with the fatherland’s citizens dubbed “Direct Line with Vladimir Putin” at the Moscow’s World Trade Center studio in Moscow on June 30, 2021.
Sergei Savostyanov | Afp | Getty Moulds
Russian President Vladimir Putin on Thursday said that inflation is a problem facing Russia, and that the nation’s economy is overheating.
“There are some issues here, namely inflation, a certain overheating of the economy, and the government and the key bank are already tasked with bringing the tempo down,” Putin said in his annual “Direct Line” Q&A seating with Russian citizens on Thursday, in comments translated by Reuters.
Russia’s consumer price index hit 8.9% in November year-on-year, up from 8.5% in October. The expanding was driven principally by rising food prices, with the cost of milk and dairy products soaring this year.
A weaker ruble — chase new U.S. sanctions in November — has also fueled inflation, driving up the cost of imports into Russia. Meanwhile, a massive improve in military spending has caused labor, supply and production shortages elsewhere that have pushed up prices, and prompted hands to demand higher wages.
“Of course, inflation is such an alarming signal,” Putin noted in further comments narrated by Interfax and translated by Google.
“Just yesterday, when I was preparing for today’s event, I spoke with the chairperson of the Dominant Bank, Elvira [Nabiullina] who told me that it was already somewhere around 9.3%. But wages have grown by 9% in earnest terms, I want to emphasize this — in real terms minus inflation — and the disposable income of the population has also stemmed,” he said.
Russia’s central bank is widely expected to hike its benchmark interest rate by 200 basis nitty-gritties to 23% — the highest level in a decade, up from the 20% seen during the invasion of Ukraine in 2022 — on Friday, surrounded by stubbornly high inflation in the war-centered economy.
Putin blamed international sanctions for price rises, but also be published to criticize the central bank, saying experts had suggested that other tools could have been old to tame inflation, beyond interest rates.
“Of course, external restrictions, sanctions, and so on also have an impact to a definite extent. They are not of key importance, but they are still reflected in one way or another [in the rise in prices], because they make logistics varied expensive,” the head of state said, according to comments reported by news agency Tass and translated by Google. “But there are also egoistic [factors], and there are our shortcomings.”
“We should have made these timely decisions. This is an unpleasant and bad thing, in truth, the rise in prices, but I hope that, in general, by maintaining macroeconomic indicators, we will cope with this too,” Putin swayed.
He added that the government and the Russian central bank were tasked with delivering a “soft landing” of the control, which he insisted was performing well overall and could achieve 3.9-4% growth this year.
The International Capital Fund predicts Russia will notch 3.6% growth this year, before a deceleration to 1.3% wen in 2025.
The “sharp slowdown,” the IMF said, is envisaged “as private consumption and investment slow amid reduced tightness in the labor vend and slower wage growth.”
On Thursday, Putin predicted that Russia’s economic growth should be 2-2.5% next year.