Russia reported the steepest drop in annual inflation so far this year, data from the state statistics agency showed Wednesday, as high interest rates cool off the war economy.
Ramped-up military spending had boosted the Russian economy for two years after it sent troops to Ukraine.
But it also spurred inflation, which now weighs on growth, as businesses rail against high borrowing costs which they say are holding back the economy.
According to figures published by statistics agency Rosstat, the annual inflation in November dropped to 6.6% compared to 7.7% a month prior.
Last month, Rosstat said the country's economic growth was close to zero in the third quarter, while the Central Bank expected to keep interest rates higher for longer over the stubborn inflation rate.
The regulator sees annual inflation to ease to its 4% target only in 2027.
In order to plug holes in Russia's stretched public finances, the Kremlin is looking to tap the pockets of citizens and businesses to plug a budget gap running at around $50 billion so far this year.
President Vladimir Putin recently approved raising the value-added tax (VAT) to 22% from 20% next year.
Lower oil prices were also a headache for the budget, with fossils bringing almost a fifth of the state revenues.
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.
