Putin acknowledges inflation threat, outlines 2025 strategy
The President of Russia, Vladimir Putin, admitted that inflation remains a significant "challenge" for his country's economy and has instructed the government to implement measures to reduce it by 2025, reports "The Moscow Times." The situation is not improving despite the record-high interest rate.
The English-language newspaper "The Moscow Times," referencing a public discussion between President Putin and Prime Minister Mishustin, reported that the annual inflation rate in Russia in 2024 was 9.5 percent. As of February 2025, the year-over-year rate of increase in consumer goods and services prices will be 9.9 percent.
- That's a challenge for us. We need to do everything necessary to ensure balanced growth - said Putin, according to a Kremlin transcript of the conversation, as cited by "The Moscow Times." The Kremlin leader also stated that the objective for this year is "to reach a balanced growth trajectory, to reduce inflation." He further emphasized that he is awaiting a government action plan to expedite structural changes in the economy.
Mikhail Mishustin added that Russia's economy grew by 4.1 percent in 2024. This matched the growth rate in 2023. The Prime Minister concurred with Putin, stating that it is "absolutely clear that the main challenge is inflation."
Interest rates in Russia
The Central Bank of Russia announced earlier this week that it sees "no signs of a sustainable slowdown in price growth," despite maintaining a record-high interest rate of 21 percent.
The regulator identified Western sanctions, the depreciation of the ruble, and poor harvests as major contributors to inflation. Likewise, defense spending, it noted, accelerates demand, which still surpasses the economy's capacity to supply goods and services.
The Central Bank of Russia forecasts that inflation will drop to between 5.2 percent and 8.6 percent by the end of 2025. The central bank plans to hold another meeting on interest rates on February 14th.
