Russian Inflation Hits 9.5% in 2024

Inflation in Russia surged to 9.5% in 2024, significantly exceeding the central bank's target of 4%, as the government ramped up military spending amid the ongoing war in Ukraine. This marks the fourth consecutive year that inflation has surpassed expectations, with rising prices in essential goods like butter, which saw a 36% increase. Analysts warn that the economy may be facing stagflation, characterized by stagnated growth alongside high inflation, as the central bank maintains interest rates at a two-decade high of 21% without successfully curbing price increases. The first two weeks of 2025 have already shown a 0.67% rise in consumer prices, driven by increases in food and transportation costs. The worsening inflation is eroding real incomes, particularly impacting vulnerable populations, with real pensions declining by 0.7% from January to November 2024. Despite these economic pressures, President Putin has indicated that military expenditures will continue unabated.