(AFP/NATALIA KOLESNIKOVA)
Inflation accelerated in November in Russia to 8.9% at an annual rate, the national statistics agency Rosstat announced on Wednesday, about a week before a meeting of the Central Bank (BCR) which could further raise its rate director, already at a record level in 20 years.
In October, inflation, notably fueled by the assault in Ukraine and its consequences, had reached 8.5%, according to Rosstat, on a high plateau for a year, well above the official target of 4%.
The high price rise is eating into the purchasing power of Russians. Recently, the explosion in the prices of butter and sunflower oil made the headlines in the Russian press, recalling the panic caused in 2023 by the rise in egg prices.
The acceleration of inflation could definitely convince the Central Bank of Russia to raise, from December 20, by one or two percentage points its key rate, already set at 21%, a level not seen since 2003.
The boss of the BCR, Elvira Nabioullina, hammers it home every week: she wants to do everything to “slow down” the rise in prices.
But several big bosses have been upset in recent days by a potential new increase in the BCR's key rate, warning of the already high cost in their eyes of borrowing, and therefore of investments. This could significantly slow down the Russian economy, at a time when the authorities are already anticipating a deceleration in activity in 2025.
In Russia, inflation is fueled in particular by the explosion in military spending for the war in Ukraine, the effects of sanctions and rising wages, a direct consequence of labor shortages on the job market, companies being obliged to offer attractive remuneration to recruit.
These shortages are the result of the departure of hundreds of thousands of men to the Ukrainian front or abroad since February 2022.
Inflation and sanctions are also weighing on the ruble, at its lowest level against the dollar and the euro since March 2022.
In this context, recent American restrictions on the major bank Gazprombank have weakened the Russian currency in recent weeks, the BCR of which set the exchange rate for Thursday at 103.3 rubles per dollar.
