Russia's annual inflation rate jumped above 10% in February to its highest level in two years, despite aggressive interest rate hikes by the Central Bank, official data showed Wednesday.
Prices have been rising fast across the Russian economy for months, driven by surging government spending on the war in Ukraine.
Annual inflation ticked up to 10.1% year-on-year last month, compared with 9.9% in January, according to the Rosstat statistics service. This marks the highest level since February 2023.
Russia's Central Bank hiked its key rate to a historic high of 21% last year in an effort to curb inflation, making borrowing more expensive for consumers.
However, economists warn that rate hikes have a limited impact when inflation is fueled by state spending.
Since launching its invasion in Ukraine, Russia has ramped up military spending to levels not seen since the Soviet era, funding large-scale missile and drone production and paying high salaries to hundreds of thousands of frontline soldiers.
Last month, the Central Bank sharply raised its inflation forecast for 2025, warning there were no signs of a slowdown. Inflation is now expected to average between 7% and 8% this year, up from an earlier projection of 4.5% to 5% for 2025.
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.
