Russian inflation strikes 6-year excessive

MOSCOW: Shopper value inflation in Russia, which has been accelerating for months, hit a six-year excessive in February, Russia’s nationwide statistics company mentioned Wednesday. The 9.15 p.c annual inflation price recorded final month by Rosstat was additionally the primary time it has exceeded 9 p.c since January 2016.

Meals costs have been up practically 11.5 p.c on an annual foundation. The inflation price is greater than double the 4 p.c goal of the Russian central financial institution and the information doesn’t but embrace the impact of Western sanctions imposed on Russia over Ukraine. Excessive inflation has already hit the buying energy of Russians, who’ve little financial savings, and proved a headache for the authorities in latest months.

Western sanctions are prone to drive up costs for a lot of items even increased, particularly because the Russian ruble has misplaced round 40 p.c of its worth because the begin of the yr, making any items that Russia manages to import much more costly for shoppers. Capital Economics famous the weekly client value info launched by Rosstat for the week to March 4, confirmed that the collapse of the ruble led to a pointy 2.2 p.c bounce in costs week-on-week.

It mentioned this price was greater than double the speed seen in the course of the collapses of the ruble in the course of the earlier crises in 2008-2009 and in 2014-2015. “The collapse within the ruble… and imposition of sanctions on Russia will push up inflation considerably within the coming months,” mentioned Capital Economics.

The Russian central financial institution greater than doubled its essential coverage price to twenty p.c final week because it sought to cease the hemorrhaging of the ruble, however to no avail. With many Russians nonetheless remembering the devastating hyperinflation of the Nineties, supermarkets have introduced measures to restrict the rise in costs on primary foodstuffs.

In the meantime, Russia introduced yesterday an export ban on greater than 200 forms of foreign-made merchandise and gear till the tip of the yr, a part of Moscow’s response to sanctions imposed over the Ukraine battle. The measure issues items and gear that have been beforehand imported into Russia from overseas. “The listing consists of technological, communication and medical gear, automobiles, agricultural equipment and electrical equipment-more than 200 forms of items in complete,” mentioned an order signed by Russian Prime Minister Mikhail Mishustin.

“This measure is critical to offer stability on the Russian market,” the order mentioned. The measure will have an effect on all international nations, however exceptions will be made for members of the Moscow-led Eurasian Financial Union and Georgia’s breakaway areas of South Ossetia and Abkhazia. Individually, the federal government additionally banned the export of “some forms of timber” to nations that “dedicated unfriendly actions” in direction of Russia.

The listing consists of 48 nations, together with EU states and the US. Russia is house to one-fifth of the world’s forest and additional exploiting this useful resource might assist the nation minimize down its financial reliance on oil and fuel. President Vladimir Putin’s “particular navy operation” in Ukraine that started on February 24 has triggered unprecedented Western sanctions and sparked an exodus of worldwide firms from Russia. – AFP

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