Kremlin Faces Economic Crisis as Inflation Soars

The Russian economy is under severe strain as growth slows and inflation surges, driven by the fallout from the Ukraine invasion and Western sanctions. Financial analysts report that the Central Bank of Russia has hiked interest rates to 21%, the highest in two decades, to combat rising prices. Inflation has soared to over twice the government’s 4% target, exacerbated by soaring military spending and a plummeting rouble.

While increased defense expenditures have temporarily averted a deep recession, they have sparked labor shortages and sustained inflationary pressures. The Kremlin’s war-driven economic strategy is straining key sectors, raising concerns about long-term stability. As sanctions bite and the rouble weakens, Russia’s economic challenges are mounting, signaling tough times ahead for the Kremlin.