On June 30, 2021, Russian President Vladimir Putin participated in an annual video conference call with citizens of the country called “Vladimir Putin Direct” at the World Trade Center studios in Moscow.
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Russian President Vladimir Putin said on Thursday that inflation is a problem facing Russia and that the country’s economy is overheating.
“There are some problems here, namely inflation, a certain degree of overheating in the economy, and the government and the central bank have been tasked with slowing down the pace,” Putin said Thursday at his annual “Straight Line” question-and-answer session with Russian citizens. In comments translated by Reuters.
Russia’s consumer price index rose to 8.9% year-on-year in November, higher than 8.5% in October. The growth has been driven largely by rising food prices, with the cost of milk and dairy products soaring this year.
A weaker ruble after the United States imposed new sanctions in November has also fueled inflation, pushing up Russia’s import costs. At the same time, huge increases in military spending have led to labor, supply and production shortages elsewhere, pushing up prices and prompting workers to demand higher wages.
In further comments, Putin noted: “Of course, inflation is an alarming sign.” Interfax reports And translated by Google.
“Just yesterday, when I was preparing for today’s event, I spoke to the president of the central bank, Elvira (Nabiullina), and he told me that it was already around 9.3%. But wages actually increased by 9%, I think. To emphasize the point – in real terms minus inflation – but also the disposable income of the population is growing,” he said.
The market is widely expected to raise the benchmark interest rate by 200 basis points to 23% – the highest level. within ten yearsup from 20% on Friday during the 2022 invasion of Ukraine, when inflation remained high in the war-centered economy.
Putin blamed international sanctions for rising prices but also appeared to criticize the central bank, saying experts suggested other tools besides interest rates could be used to curb inflation.
“Of course, external restrictions, sanctions, etc. will also have a certain impact. Although they are not critical, they will still be reflected in one way or another (that is, rising prices) because they make logistics less important. “More expensive,” the head of state said, Comments according to TASS news agency And translated by Google. “But there’s also subjective (factors) and there’s also our shortcomings.”
“We should be making these timely decisions. The fact is that rising prices are an unpleasant and bad thing, but I hope that, overall, by maintaining macroeconomic indicators, we can deal with this as well, “Putin said.
He added that the task of the government and the Russian central bank was to achieve a “soft landing” for the economy, insisting that the economy was performing well overall and could achieve growth of 3.9-4% this year.
The International Monetary Fund predicts that Russia’s economic growth rate will reach 3.6% this year, and the growth rate will slow down to 1.3% in 2025.
The International Monetary Fund said it expected a “sharp slowdown” in the economy “due to easing labor market tightness and slower wage growth, slowing private consumption and investment.”
On Thursday, Putin predicted that Russia’s economic growth should be 2% to 2.5% next year.
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