The war that the illegitimate president of the Russian Federation, Vladimir Putin, unleashed against Ukraine, brings extremely bitter results for the aggressor country itself. The entire Russian people found themselves under the blow of inflation.
Points of attention
- The Central Bank of the Russian Federation cannot control inflation, even by raising the key interest rate.
- This indicates serious problems in the economy of the aggressor country.
- The rise in prices in Russia is caused by large military expenditures and labor shortages amid the war against Ukraine.
- New US sanctions have made international payments more difficult and increased costs for importers in Russia, leading to further deterioration of the economic situation.
Inflation in Russia is gaining momentum. The Kremlin and the Central Bank are powerless
American journalists draw attention to the fact that in 2023 the Central Bank of Russia doubled the key interest rate in an attempt to control prices.
However, he could not save the situation, which continues to deteriorate rapidly.
According to official data, inflation in the aggressor country reached 9% as of July 2024.
The growth of prices for products and various services does not abate: from potatoes (91% growth this year) to economy class flights (35% growth).
What is important to understand is that on July 26, the Central Bank raised the key rate — by two percentage points — to 18 percent per annum, but the Russian authorities should not expect positive changes after that.
Inflation has become a characteristic feature of the Russian military economy. Increased military spending and a record labor shortage as some working-age men go to the front and others flee the country have led to price increases. New US sanctions have made international payments more difficult and led to increased costs for importers, the publication explains.
Russia has no tools to curb inflation
Despite the fact that social unrest has not yet started in the aggressor country, the imbalance in the economy is growing.
Foreign analysts predict that the war against Ukraine will cost Russia more and more.
Currently, neither the Kremlin nor the Central Bank know how to stop inflation. It will gain momentum while the Russian army is fighting against peaceful Ukrainians.
Experts also drew attention to the fact that in July in Russia, preferential mortgages at 8% were canceled. It is not difficult to guess that such an approach will provoke the inflation of the bubble in the real estate market.
In a recent report, JP Morgan analysts noted that tight monetary policy in Russia "remains a mysterious phenomenon."
