Putin targets 2025 to tackle Russia's inflation crisis
The President of Russia, Vladimir Putin, has acknowledged that inflation remains a significant "challenge" for the country's economy. He has instructed the government to implement measures to reduce inflation by 2025, as reported by "The Moscow Times." The situation continues to be problematic despite the record-high interest rate.
The English-language newspaper "The Moscow Times," quoting a public discussion between President Putin and Prime Minister Mishustin, revealed that the annual inflation rate in Russia for 2024 was 9.5 per cent. By February 2025, the year-on-year increase in consumer goods and services prices is expected to be 9.9 per cent.
- This poses a challenge for us. We must do everything necessary to ensure sustainable growth - stated Putin, according to a Kremlin transcript of the conversation, as reported by "The Moscow Times." The Kremlin leader also mentioned that the objective for this year is "to reach a balanced growth trajectory, to reduce inflation." He further emphasised that he is anticipating a government action plan to expedite structural changes in the economy.
Mikhail Mishustin added that Russia's economy grew by 4.1 per cent in 2024, matching the growth rate from 2023. The Prime Minister agreed with Putin, stating that it is "absolutely clear that the main challenge is inflation."
Interest rates in Russia
The Central Bank of Russia informed earlier this week that it sees "no signs of a sustainable slowdown in price growth," despite maintaining a record-high interest rate of 21 per cent.
The regulator attributed the main contributors to inflation to Western sanctions, the depreciation of the rouble, and poor harvests. Additionally, it noted that defense spending fuels demand, which continues to outstrip the economy's capacity to supply goods and services.
The Central Bank of Russia forecasts that inflation will decrease to between 5.2 per cent and 8.6 per cent by the end of 2025. The central bank plans to hold another meeting on interest rates on 14 February.
