What is the real level of inflation in Russia currently? If the Kremlin shows its muscles by launching new types of missiles at Ukraine, if “the triumph of Russian technology“is celebrated facing, in particular, the”astonishment of the West“, there are performances that leaders talk less about, such as inflation.
Officially around 9%, it would in reality be significantly higher. The media and an independent institute which study the average basket, month after month, estimate it to be around 20%.
The Russian government may repress all dissent, but it knows that it will have difficulty stifling discontent if it hits Russians hard in their daily lives. Vladimir Putin knows this, he who often uses an expression that was used a lot in the Soviet Union. In the context of the war economy that prevails in Russia, a balance must be found between “butter and cannons”, insists the head of the Kremlin.
But butter has become a symbol in Russia. Its price has almost doubled in one year, just like that of most dairy products. “I bought it for 87 rubles a week ago, now it costs 114testifies Galina, passing as she leaves a supermarket, a bottle of kefir, a type of typically Russian drinking yogurt, in her hand. Everything is becoming more expensive, fruit, bread… Prices are increasing a lot“, she confides.
However, if the price of butter and kefir is increasing, it is because of the sanctions: certain ingredients have to be imported, and this is more and more expensive, with an increasingly weak ruble.
To try to curb this inflation, the Russian central bank raised its key rate from 19 to 21% at the end of October – its highest level since 2003 – attracting the wrath of many entrepreneurs, worried about seeing the cost of borrowing increase further. . Example: the average rate for a property loan today is 25% in Russia.
But Elvira Nabioullina, the boss of the central bank, does not want to give up anything: economic stability rather than an increase in growth at all costs, she defended again on Tuesday, November 19, before deputies of the Duma.
“Our policy aims to curb the rise in prices. Without this, sustainable economic growth is impossible”
Elvira Nabioullinain front of Russian deputies
“People are once again worried about the incessant rise in prices. It is the poor who are hardest hit, those whose incomes are not increasing or not as fast as the average. And you know better than me that these there are many people…”, she insisted.
The fight against inflation is becoming another front for Russian power. And he has no solution at the moment.
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