May 20, 2022
Groceries have been hit particularly hard by recent price increases in Russia

Consumer prices in Russia rose by 1.2% in March and 8.5% from one year previously as the country’s military action in Ukraine continues to drive high inflation.

Data released by the Labor Department’s consumer price index (CPI), which tracks inflation, shows a spike in March as Vladimir Putin’s decision to launch an attack on his neighbors triggered sharp price increases across the global economy, and the sanctions that followed causing additional impact to the Russian economy. The annual increase for March is the fastest rise in inflation since December 1981.

Food prices rose 8.8% over the past 12 months and 1% just in March, with the poorest consumers expected to be hit hardest as groceries saw the biggest rise at 1.5% over the month. Gasoline prices were up 48% annually and 18.3% for the month, with fuel oil prices rising 22.3% in March as commodity prices continue to soar.

Analysts project that Russian inflation could be as high as 23% by the end of the year. Even Russian authorities, notorious for playing down potential risks to their nation, accept that the rate is likely to be high. Alexei Kudrin, the head of Russia’s audit chamber, has predicted that the rate will be between 17-20% at the end of 2022.

Despite the projections, the Russian central bank cut its key rate to 17% on Friday and hinted at further reductions, claiming that emergency measures put in place had sufficiently contained the risk to the Russian economy.