Russia faces stagflation threat as growth slows: Prices for bread have jumped so much over the last few years that Russian pensioners sometimes have to go without
Russia faces stagflation threat as growth slows: Prices for bread have jumped so much over the last few years that Russian pensioners sometimes have to go without
cross-posted from: https://feddit.org/post/2778064
Moscow has funnelled billions of dollars to its army, soldiers, their families and weapons makers to sustain its military campaign -- a spending splurge that helped it defy Western hopes that sanctions would push it into economic collapse.
But after warning for months that the economy was overheating, the country's Central Bank has lately started mentioning the possibility of another, possibly more challenging development: stagflation.
"The shortage of (labour) resources may lead to a situation where economic growth slows down, despite all the efforts to stimulate demand, with all that stimulus accelerating inflation," Central Bank Governor Elvira Nabiullina said over the summer.
"In essence, this is a stagflation scenario, which can only be stopped at the cost of a deep recession," she warned.
'De-modernising'
Stagflation -- a period of low or stagnant growth accompanied by high inflation -- would present a fresh headache for the Kremlin, which has until now navigated the economic fallout of its offensive on Ukraine better than most believed possible.
Moscow has increased government spending by almost 50 percent since sending troops into Ukraine, pushing up growth and wages.
Unemployment is at a record low and consumer confidence is its highest in 15 years.
But an exodus of both skilled and unskilled workers -- who fled mobilisation or joined the army -- has created millions of unfilled vacancies. Sanctions on Western technology have also hit productivity and damaged supply chains.
"In the long-term these demographic factors and technological issues will result in very low economic growth," Ruben Enikolopov, a Russian professor at the Barcelona School of Economics, says.
"There is a high probability of a stagflation scenario in 2025 and the years after. It's not a certainty, but high likelihood," he added.
This is just western propaganda. Bread has never been cheap or affordable. It has always been a luxury product. Don't believe the western lies! (/s of course)
Living in Eastern Germany, the percentage of people who actually believe the Russian economy is going great, is quite staggering.
That is so sad :(
You run into them on fediverse from time to time if you haven't blocked lemmy.ml.
Ah, never mind, you'll bear with it (/satire, just to be safe).
A few numbers more:
Annual inflation in August 2024 was 9.05%, around the same level as in July 2024 when it was 9.13%.
Annual inflation rates in Russia this year (2024):
- January: 7.44%
- February: 7.69%
- March: 7.72%
- April: 7.84%
- May: 8.3%
- June: 8.59%
- July: 9.13%
- August: 9.05%
The slowdown in inflation in August was expected and is explained by the seasonal decline in the price of fruit and vegetables, according to Russia's Federal State Statistics Service (Rosstat) which these statistics all come from.
In January-August 2024, prices increased by 5.25%. In January-August 2023, prices increased by 3.70% (again, the data comes from Rosstat).
(It is noteworthy that the Jan-Aug 2023 rise of 3.70% is already high.)
As the article also states:
"The shortage of (labour) resources may lead to a situation where economic growth slows down, despite all the efforts to stimulate demand, with all that stimulus accelerating inflation," Central Bank Governor Elvira Nabiullina said over the summer.
[Edit typo.]
Do not, my friends, become addicted to water. It will take hold of you, and you will resent its absence.
Huh, if there only was a way to get rid of those sanctions...
This all doesn't matter if Ukraine can't win the war.
Russia needs to be able to produce enough weapons to wage war. That is also true for any potential war against EU members, such as the Baltic states or Poland.
Also Russia and Ukraine can both be defeated in the same peace deal. Just look at the British Empire and WW2. The UK one, but it lost its Empire.
Russia needs to be able to produce enough weapons to wage war
Of course, but if Ukraine loses before Russia crumbles, it won't matter to Ukraine. No one knows how long it will take for Russia to crumble nor if it ever will. China, Iran, North Korea, and Turkey are all supporting it.
Erdogan recently said Russia should return Crimea, but is he willing to sanction Russia? Russia is running out of Yuan, but will China truly stop trading with Russia or will they just accept debt? It's a very complicated situation and if the West doesn't allow Ukraine to strike Russia with long range missiles nor provide enough weapons and ammunition to drive Russia back, Russia's economic woes don't matter. They don't matter if Russia wins the war.
Also Russia and Ukraine can both be defeated in the same peace deal
What kind of peace deal are you talking about?
Sticks to be them. Maybe they should revolt against Putin. I mean it might get them killed, but on the bright side at least they won't be starving.
Am i missing something? I read the article and it never mentioned the price of bread
