Russian President Vladimir Putin has urged his government and central bank to curb Russia's 8% inflation rate that far exceeds the target of 4%. The high inflation rate coupled with record-high interest rates at 21% is creating challenges for businesses and impacting the savings of ordinary citizens.
Addressing the Inflation Crisis
Putin emphasized the need for coordinated efforts between the government and the central bank to address the pressing issue of inflation. He acknowledged the current inflation rate of 8% as relatively high and stressed the importance of aligning key macroeconomic indicators to prevent imbalances in various sectors.
Call for Coordinated Action
During an investment forum in Moscow, Putin reiterated the importance of joint efforts to combat inflation, stating that it is more than just a recommendation but a guide to action. He highlighted the ongoing coordination between the government and the central bank to tackle the economic challenge.
Inflation Target and Supply Increase
Russia's inflation target stands at 4%, and Putin suggested increasing the supply of goods and services to counter inflation. Before the pandemic and conflict in Ukraine, the country's inflation rate was significantly lower, reaching 3% in December 2019.
Challenges Faced by Businesses
The recent hike in interest rates to 21% by Russia's central bank has drawn criticism from business leaders and industry figures. Concerns have been raised about the impact of high interest rates on the profitability of businesses, particularly in the current economic climate.
Impact on Savings and Economic Outlook
The rising prices in Russia have led to increased costs of essential commodities, affecting the savings of individuals. The cash savings of Russians have hit a record low, reflecting the strain caused by high interest rates. Despite expectations of a further interest rate hike, the central bank remains cautious about the potential for a recession.
Overall, Putin's call for decisive action to address inflation reflects the challenges faced by Russia's economy and the need for coordinated measures to stabilize the financial landscape.
—————————————————————————————————————————————
By: htan@insider.com (Huileng Tan)
Title: Russian President Putin Calls for Action to Tackle High Inflation Rates
Sourced From: www.businessinsider.com/putin-russia-economy-pain-point-inflation-interest-rate-vtb-forum-2024-12
Published Date: Thu, 05 Dec 2024 07:16:46 +0000
Related posts:
Apple Hits New All-Time High as Slowing Inflation Boosts Big Tech Stocks
The Russian Government and Central Bank Clash over Capital Controls
Elon Musk criticized the Fed over 20 times, accusing it of raising interest rates to high levels. This is a list of all his criticisms against the central bank.
Challenges for Russian Businesses as Yuan Financing Costs Rise
Leave a Reply