Russia is facing the threat of stagflation, with its GDP slowing and inflation remaining high. The Bank of Russia recently raised interest rates to 19%, but inflation continues due to high defense spending and labor shortages, worsened by wartime demands. Despite a cooling in domestic demand, inflationary pressure remains strong.
The economy, which benefited from a wartime boom, is expected to weaken by 2025 due to sanctions, oil production cuts, and a shrinking labor force. If the situation persists, Russia could face the same severe economic challenges the U.S. experienced during the 1970s stagflation.
Russia’s economy is signaling a fate worse than recession
Sep 26, 2024
Article from Markets Insider by Filip De Mott
Article Synopsis
