Page 14 - RusRPTNov23

Inflation: the biggest problem Russia’s economy faces today is the return of inflation as the base effects wear off and the huge public sector spening on the military industrial complex.
On top of that a very tight labour market and lead to an acceleration in the rise of nominal wages that, although consumption is fuelling growth, is also feeding into rising prices.
All hopes of hitting the CBR’s 4% inflation target are now dashed after the regulator was forced to hike rates in August to stop a rule meltdown and the CBR doesn’t expect to meet this target until at least next year.
“The median inflation forecast for 2023 has been increased to 7.0% (0.7 p.p compared to the September survey) and to 5.1% (0.6 p.p.) for 2024. analysts expect inflation to return to the target of the Bank of Russia in 2025 and remain at this level in 2026,” the CBR said.
14 RUSSIA Country Report November 2023 www.intellinews.com