Russia's Economic Strain: Inflation and Interest Rates on the Rise

President Vladimir Putin expressed concerns over Russia's overheating economy leading to high inflation. Subsequently, the central bank is expected to raise interest rates significantly, facing criticism from businesses. Influences include Western sanctions and bad harvests causing price spikes in food items affecting Russian households.

The Russian economy is showing signs of strain as inflation reaches alarming levels, President Vladimir Putin stated during his annual phone-in session. Supporting the central bank's stringent monetary policies, he suggested more timely actions could have curbed the situation earlier.

The central bank is anticipated to increase its key interest rate by 200 basis points to 23%, marking a two-decade high. This aggressive stance has sparked criticism from businesses, with Putin acknowledging the economy's overheating and the government's efforts to decelerate growth.

Putin also discussed external factors such as Western sanctions and poor harvests, attributing them to soaring food prices. Recent inflation data revealed notable price hikes, with essential food items becoming costlier, impacting the Russian populace's financial stability.

(With inputs from agencies.)