Russia is an inflation warning. Recovery in danger?

The Russia’s economic recovery in danger. All wrong with it economic inflation It was exacerbated by Putin and Kremlin leaders’ anti-Covid stimulus, but also by the central bank’s interest rate cut – which fell to a minimum of 4.25%, then raised to 5% – and by the massive race in food prices on a global scale.

Having slowed down in April, + 5,5%In May, the annual inflation rate rose to + 5.9%, in the direction of that second Elvira Nabiulina, number one for the central bank, can turn into “An obstacle to economic recovery“.

Russia is an inflation warning. Recovery in danger?

the rest, Nabiulina, who spoke at the Saint Petersburg International Economic Forum (SPIEF) this morning, does not think inflationary pressure In Russia “Temporary“It is thus mostly attributable to restarting the economy, and is even associated with it.”For other fixed factors, mostly monetary“.

As confirmed by the Minister of Finance thesis, Anton Siluanov, who spoke to a SPIEF audience said:If we keep increasing spending, what will we get? Economy overheating. The effects are already obvious, such as higher inflation“.

Russian inflation is currently much higher than targeting Fixed by the central bank itself, al 4%It is likely to end up on the table at the union’s next meeting of central bankers scheduled for June 11.

Analysts expect a interest rate increase Not less than 25 basis points, from 5% current rule 5.25%, with Nabiulina who, however, already mentioned “The risk of seeing hypertrophy is very high for several months“.

Uneven growth in Russia

Another bad thing, for the central bank, is what growth disorders, although there is: According to the latest bulletin, in fact, the economy rebounded again in the second quarter of the year, and GDP – if inflation allows – could reach pre-pandemic levels already during the summer.

But as the central bank analysts themselves have pointed out.”Unfair growth. Export-focused industries and the service sector are recovering for months at a rate well above the national average“.