Russian economy in meltdown as Putin warned of shocking inflation | World | News

Russia’s economy is in meltdown yet again as Vladimir Putin had to be warned of the shocking levels of inflation.

Prime Minister Mikhail Mishustin reported to Putin that Russia‘s economy expanded by 4.1% in 2024, slightly surpassing the official projection of 3.9%.

During a meeting broadcast on state television, Mishustin informed Putin that the nation’s gross domestic product soared to an unprecedented 200 trillion roubles (£1.6 trillion).

Putin expressed his approval of the economic performance, describing the results as “good” and “satisfactory”.

However, he reiterated his desire to see inflation, which stood at a high of 9.5% in 2024, come down.

He also pointed out that Russia‘s economic growth outpaced that of what he termed “so-called developed countries”, highlighting lower growth figures for the United States, Germany, and France in 2024.

Contrary to Western forecasts of a collapse due to sanctions imposed over its conflict in Ukraine, the Russian economy has shown resilience, with increased military expenditure contributing to growth but also driving up consumer prices.

But soaring inflation has become a significant concern for both the Russian economy and consumers, who have witnessed rising prices for basic goods in supermarkets.

The central bank, acknowledging signs of economic overheating, has kept its benchmark interest rate at 21%, the highest in two decades, as part of efforts to curb inflation.

These high interest rates, coupled with labour shortages, have put pressure on the economy in recent months.

This comes as foreign investment crashed to a 15 year low as global businesses continue to pull their money from the country.

Russia lost £111 billion in the first year of the war with Ukraine, £64 billion in 2023, and £35 billion last year, according to data from the Central Bank.