Russian President Vladimir Putin Says Inflation is a Problem, Economy is Overheating
Russian President Vladimir Putin has acknowledged that inflation is a major issue facing the country, with the consumer price index reaching 8.9% in November year-on-year. Speaking during his annual “Direct Line” Q&A session with Russian citizens, Putin stated that the economy is overheating and that the government and central bank are working to bring the pace of growth down.
Putin pointed to a range of factors contributing to the current inflationary pressures, including rising food prices, a weaker ruble, and a massive increase in military spending. This has led to labor, supply, and production shortages, as well as higher prices and demands for higher wages. The Russian central bank is expected to raise its benchmark interest rate by 200 basis points to 23%, the highest level in a decade, on Friday.
While acknowledging the impact of international sanctions on price rises, Putin also criticized the central bank, suggesting that other tools could have been used to tame inflation beyond interest rates. He emphasized the need for a “soft landing” of the economy, which he believes will perform well overall and achieve 3.9-4% growth this year.
The International Monetary Fund predicts a 3.6% growth rate this year, with a subsequent slowdown to 1.3% growth in 2025. President Putin, however, is more optimistic, predicting 2-2.5% growth next year.
