Russia's hidden inflation crisis: Interest rates hit 21%
The Russian Statistical Office has not published detailed inflation data for September. The Kremlin is concealing statistics as prices in Russia are rapidly increasing. Consequently, the central bank has raised the main interest rate to 21 per cent, marking the highest level in over 20 years.
As noted by "The Moscow Times," Rosstat released the general inflation rate for September on 11 October. However, despite two weeks since then, detailed data has not been available on the office's website or in the Unified Interdepartmental Information and Statistical System (EMISS).
This concerns detailed statistics indicating the extent to which prices for specific goods and services have risen, which Rosstat includes in its consumer basket. According to the latest data, inflation fell in September to 8.6 per cent from 9 per cent in August.
However, according to Paweł Jeżowski, a stock market investor and analyst of Russian economic data, inflation may be as high as 30 per cent. He mentioned this on the "Didaskalia" programme at the end of July. Furthermore, economists from the Stockholm Institute of Economics have warned that the Kremlin is falsifying data on price increases.
Soaring prices have prompted the Russian central bank to raise the main interest rate to 21 per cent, the highest level in over two decades. In an official statement, the bank reported that inflation is rising due to increased demand resulting from heightened public expenditure, credit offerings, and a shortage of workers.
Significant spending on the military, payments to soldiers and their families, and expenditures in the arms sector, along with the general shift of Russia's economy to war mode, allow it to largely mitigate the effects of Western sanctions. However, this leads to inflation, explains the French agency AFP.
"The economy of death creates a financial bubble"
In recent months, Russian company heads have complained about the rising costs of bank loans and, consequently, investments, which they believe limit economic growth, particularly in sectors not related to the arms industry.
The newspaper "Le Monde" recently emphasised that "the economy of death fuels economic growth in Russia". According to the Parisian Daily, large expenditures on the arms industry, soldiers' salaries, and compensation for the families of the deceased create "a financial bubble that prolongs the war". The influx of money reaching consumers increases demand but overheats the Russian economy, causing inflation to rise.
