Inflation in Russia hits highest in more than 20 yrs amid Western sanctions

Annual inflation in Russia accelerated to 17.49 per cent as of April 8, its highest since February 2002 and up from 16.70 per cent a week earlier, the economy ministry said on Wednesday, as the volatile ruble sent prices soaring amid unprecedented Western sanctions. Prices on nearly everything from vegetables and sugar to clothes and smartphones have risen sharply since Russia’s February 24 invasion of Ukraine.

The central bank warned on Wednesday that consumer inflation in Russia will keep on accelerating in annual terms due to base effects, saying that ruble volatility will lead to upside inflationary pressure. 

Weekly inflation in Russia slowed to 0.66 per cent in the week to April 8 from 0.99 per cent a week earlier, taking the year-to-date increase in consumer prices to 10.83 per cent, the data from statistics service Rosstat showed on Wednesday.

In the same period a year ago, consumer prices rose 2.72 per cent.

The central bank, which aims for annual inflation of 4 per cent, cut its key rate to 17 per cent from 20 per cent on Friday and said future cuts were possible.

Inflation in Russia could reach between 17% and 20% this year, Alexei Kudrin, the head of Russia's audit chamber, said on Wednesday. Analysts polled by Reuters in late March had on average forecast 2022 inflation to accelerate to 23.7%, its highest since 1999.