The head of the Russian Central Bank, Elvira Nabiullina, said that the country’s economy is at a “turning point,” explaining that economic transformation is on the horizon.
Russian Central Bank President Elvira Nabiullina told the government yesterday that the country is approaching a “turning point” in terms of inflation and interest rates, Moscow-based RBC Group reported.
Nabiullina explained to the Duma that inflation should slow, although she did not specify when this would happen. Inflation reached 9.8% in September.
She said: “We believe that our policy will reduce inflation to 4.5 to 5% next year, and then stabilize at 4%. As it slows, we will consider a gradual reduction in the headline rate. If there are no additional external shocks, the reduction will begin next year.”
She noted that credit activity was slowing due to the high price, but said that some industries continued to borrow.
Earlier this month, local officials and business leaders shared pessimistic economic forecasts for next year at an economic forum.
Nabiullina’s comments come as the war in Ukraine approaches its third anniversary and inflation in Russia reaches extremely high levels.
Last month, to tame prices, the Russian Central Bank raised its key interest rate to a record high of 21%. The bank said earlier this month that it may raise its key interest rate again at its next meeting in December.
The government continues to spend heavily on defense. In September, Russia raised its national defense spending for 2025 by 25%, to more than $145 billion, signaling its intention to continue its war in Ukraine.
For ordinary Russians, the effects of inflation are being felt at the ground level. The cost of staple foods such as butter and potatoes has risen more than 25% this year.
The country is also experiencing a labor shortage and a population crisis.
While Nabiullina’s comments this week suggest positive change is imminent, other leaders in Russia have expressed more pessimistic economic forecasts.
