Putin tackles inflation as Russia's economy faces challenges
The President of Russia, Vladimir Putin, acknowledged that inflation remains a serious "challenge" for his country's economy and instructed the government to take 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," citing a public conversation between President Putin and Prime Minister Mishustin, reported that the annual inflation rate in Russia in 2024 was 9.5 percent. Meanwhile, in February 2025, the year-over-year rate of increase in consumer goods and services prices is projected to 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 task 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 accelerate structural changes in the economy.
Mikhail Mishustin added that Russia's economy grew by 4.1 percent in 2024. This was the same growth rate as in 2023. The Prime Minister also agreed with Putin that it is "absolutely clear that the main challenge is inflation."
interest rates in Russia
The Central Bank of Russia informed 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 listed Western sanctions, the depreciation of the ruble, and poor harvests as the main factors contributing to inflation. Similarly, defense spending, it noted, accelerates demand, which still exceeds the economy's capacity to supply goods and services.
The Central Bank of Russia forecasts that inflation will fall 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 14.
