Inflation in Russia continues to grow to the point where President Vladimir Putin acknowledges that there is a problem in the federation. It rose to 9.9 percent in January and exceeded 9.5 percent recorded last year. The leader of the Kremlin accepted the existence of a “challenge” for the national economy and ordered to take measures to overlap at a meeting with Prime Minister Mikhail Mishustin.
“We need to do everything you need to achieve balanced growth. This year’s target is to achieve balanced growth and reduce inflation.” He said.
Central Bank, recently “price growth has not seen a sign of sustainable decrease,” he said. However, under political pressure, it has already decided to change interest rates by 21 percent. The government will now have to develop a structural reform program for the economy.
War economy
Last year, GDP increased by 4.1 percent, which was the same increase in 2023. Mishustin announced that the expansion was directed by military expenditures, but that 2025 expectations appear with a thicker, falling growth and still high inflation.
For almost three years, the war effort has now become the main engine of the Russian economy, which is strongly dependent on investments in the military-industry complex. According to Putin, Russia’s general budget for defense and security in 2024 will be about 8.7 percent of GDP: an unprecedented data since the autumn of the USSR in 1991. However, the federation economy suffers from lack of labor. , because hundreds of thousands of Russians leave at home or abroad.
Decrease in oil price
Even if the decline in global oil prices, a new foreign policy analysis suggests that the decrease in crude oil price will only be seen in the coming months, the main source of Russian income is at risk. At the end of the year’s speech, Zar Russo was the first to accept the existence of economic problems and even talked about the increase in inflation. In recent months, the Russian economy has been tested by high interest rates against inflation.
The Federation no longer records the growth observed in 2023 and 2024, when the Russian GDP increased more than the European Union and the United States. When the national economy of $ 2.2 trillion shows significant flexibility during the war, it seems to push Putin to praise the economic officials and the business world because they respond to the Penalties of the West.
However, since the beginning of the occupation of Ukraine, Moscow showed how it would find alternatives for oil trade and led exports to new routes. He sent crude oil to China and India, which can no longer supply Europe, at lower prices.
Source: Today IT
Karen Clayton is a seasoned journalist and author at The Nation Update, with a focus on world news and current events. She has a background in international relations, which gives her a deep understanding of the political, economic and social factors that shape the global landscape. She writes about a wide range of topics, including conflicts, political upheavals, and economic trends, as well as humanitarian crisis and human rights issues.
