Russian President Vladimir Putin acknowledged on Feb. 7 that inflation remains a major challenge for the country’s economy and directed the government to develop measures to lower it in 2025.
Speaking at a televised meeting with Prime Minister Mikhail Mishustin, Putin noted that consumer prices in Russia rose by 9.5% in 2024 and have climbed further to 9.9% year-on-year this month, according to the Moscow Times.
Putin reportedly emphasized the need for "balanced growth" and reiterated his expectation for the government to present a plan to address inflation and advance structural economic changes. "The task for this year is to reach a balanced growth trajectory, to reduce inflation," he said, according to a Kremlin transcript.
Mishustin reported that the Russian economy grew by 4.1% in 2024, revising an earlier estimate of 3.6% for 2023 to match the latest figure. However, he agreed with Putin that inflation was the biggest concern.
The Russian Central Bank recently said that it sees "no signs of a sustainable slowdown in price growth" despite maintaining a high key interest rate of 21%. The regulator pointed to Western sanctions, the ruble's depreciation, and a weak harvest as key inflationary pressures. Additionally, increased defense spending is driving demand beyond the economy's capacity to supply goods and services.
The Central Bank forecasts inflation to ease to a range of 5.2% to 8.6% by the end of 2025. Its next rate meeting is scheduled for Feb. 14, where policymakers will assess further measures to stabilize the economy.
Dominic Culverwell
