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.
After a lull in 2023, inflation has again spiked in Russia, peaking at over 9 percent this summer before falling back to 8.5 percent in October, according to Russia's national statistics agency Rosstat.
In response, the Central Bank of the Russian Federation raised its key interest rate from 19 percent to 21 percent at the end of October, the highest level in more than two decades, in an effort to bring inflation back in line with its target of 4 percent.
Since the start of the full-scale invasion of Ukraine on February 24, 2022, Moscow has managed to maintain robust economic growth despite Western sanctions. But the cost of living has soared by almost 30 percent – twice as high as the average rise in the eurozone.
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