Russia CPI Inflation Rate: Data, Forecast & Trends

In April 2025, Russia's annual inflation rate eased marginally to 10.2% year-on-year (YoY), down from a two-year high of 10.3% recorded in March 2025. This slight deceleration followed five consecutive months of increases, providing a glimmer of hope that the peak inflationary pressures might be subsiding, albeit from a very elevated level. This inflation rate significantly surpasses the Central Bank of Russia's target of 4% and places Russia's inflation among the highest rates globally.

The sustained high inflation highlights the deep structural challenges and external pressures facing the Russian economy. Despite the CBR's aggressive interest rate hikes, the impact on consumer prices has been slow to materialize.

A closer look at the components contributing to the 10.2% annual inflation in April 2025 reveals distinct patterns of price growth:

• Services experienced the sharpest inflation, rising by 12.9% YoY. This reflects robust domestic demand, wage growth, and possibly a reallocation of consumer spending towards services as import options for goods become more constrained. Public transport fares and the indexation of certain housing and utility tariffs were noted contributors to this acceleration.
• Food products also showed significant price increases, climbing by 12.7% YoY. This category has consistently been a major driver of inflation in Russia, influenced by global food commodity prices, ruble depreciation, and domestic supply-side factors. Within food, specific items like fruits and vegetables, and meat, have seen particularly sharp rises.
• Goods excluding food (non-food products) recorded an increase of 9.3% YoY, which, while elevated, was below the overall consumer basket average. This category is particularly susceptible to import restrictions and supply chain disruptions, which can lead to higher prices for a range of consumer durables and imported consumer goods. Clothing and footwear, and household appliances, are also notable components within this category.

The producer price index (PPI) also saw a significant increase of 5.9% YoY in March 2025, indicating that cost-push pressures from industrial and agricultural sectors are feeding into consumer prices.

On a month-over-month (MoM) basis, Russia's CPI increased by 0.4% in April 2025, a slower pace compared to the 0.7% increase in March and 0.8% in February. This sequential slowdown in monthly price growth offers some evidence that the tightening monetary policy may be starting to have an effect on current inflationary pressures.

While specific component-level monthly data for April was not fully detailed, general trends indicate that:

• Monthly price increases in food products and services remained noticeable, though at a slightly decelerated pace compared to previous months.
• The growth rates of non-food prices decelerated to low levels, suggesting some easing of pressures on manufactured goods.

The monthly dynamics suggest that the immediate inflationary impulses are moderating from their peak, but prices are still rising, and the annualized rate remains stubbornly high.

Russia's average annual inflation rate for the calendar year 2024 reached approximately 8.5%. This figure marks a significant increase from the 5.9% recorded in 2023, highlighting persistent and elevated price pressures within the economy. The surge in inflation throughout 2024 was largely driven by a combination of factors, including robust government spending, particularly on military outlays, and ongoing labor shortages.

Geopolitical tensions and Western sanctions have also played a substantial role, contributing to supply-side constraints and a weakening of the ruble, which in turn amplified import costs. Despite aggressive monetary policy tightening by the Central Bank of Russia, with substantial increases in the key interest rate, inflation remained stubbornly high. This indicates that while the central bank actively worked to curb price growth, the underlying structural and fiscal drivers continued to exert significant upward pressure on consumer prices.

Russia's inflation history over the past three decades is marked by extreme volatility, reflecting periods of profound economic transformation, financial crises, and geopolitical shocks.

The early 1990s, following the collapse of the Soviet Union, were characterized by hyperinflation as price controls were lifted and a market economy was established. In 1992, the annual inflation rate soared to an astounding 2,333.3%, followed by 840% in 1993 and 215% in 1994. This period of rampant price increases decimated savings and necessitated continuous monetary reforms.

Throughout the late 1990s, inflation gradually came under control, although it remained high by international standards. The 1998 financial crisis saw another sharp spike, with inflation reaching 84.4% in 1999, as the ruble sharply depreciated and the government defaulted on its debt.

The 2000s generally witnessed a period of more stable, albeit still elevated, inflation, largely driven by rising oil prices set against a more coherent macroeconomic policy framework. Annual rates typically ranged from 10% to 15%.

The 2010s saw the Central Bank of Russia (CBR) increasingly adopt an inflation-targeting regime, aiming to bring inflation down to a 4% target. However, external shocks continued to cause volatility. The annexation of Crimea and subsequent Western sanctions in 2014-2015 led to a significant depreciation of the ruble and an inflation surge,

The most recent period, post-February 2022, has seen a resurgence of high inflation. Following the full-scale invasion of Ukraine, the inflation rate soared to 17.8% in April 2022, driven by sanctions-induced supply disruptions, capital flight, and ruble depreciation. While inflation temporarily eased due to high interest rates and base effects, it has been on an upward trajectory over the last year, indicating persistent underlying inflationary pressures despite the CBR's tight monetary policy.

The distinction between core and headline inflation is especially pertinent in Russia, given the significant volatility of its food and energy components, often influenced by global markets and domestic agricultural conditions. Headline inflation includes all items in the CPI basket, while core inflation typically excludes highly volatile categories like food and energy.

In April 2025, while headline inflation stood at 10.2% YoY, core inflation was recorded at 9.23% YoY. This relatively small divergence between headline and core inflation indicates that the inflationary pressures in Russia are broad-based and not solely driven by volatile food and energy prices. While food prices are a significant contributor (12.7% YoY), the high core inflation figure suggests that demand-side pressures and structural issues are firmly embedded across various sectors of the economy.

The fact that core inflation is only about one percentage point lower than headline inflation underscores the pervasive nature of inflation in Russia. It implies that tight labor markets, strong domestic demand fueled by government spending (including defense), and the impact of sanctions on import channels are contributing to price increases across a wider range of goods and services. The high core inflation rate means that the CBR's monetary policy needs to remain exceptionally tight to bring overall inflation down to its target.

The outlook for Russian inflation is fraught with significant risks, primarily stemming from the complex interplay of geopolitical tensions, government spending, and the effectiveness of monetary policy:

• Geopolitical Escalation and Sanctions Impact: Any further escalation of the conflict or tightening of Western sanctions could exacerbate supply chain disruptions, limit access to critical imports, and potentially lead to further ruble depreciation. Such developments would directly translate into higher import costs and a renewed surge in inflation. The ongoing need to re-route trade flows and establish new supply chains also creates inherent inflationary inefficiencies.
• Fiscal Policy and Government Spending: The Russian government's sustained high levels of spending, particularly on defense and social programs, create significant aggregate demand. This fiscal stimulus, while supporting economic activity, is a major pro-inflationary force, especially in an economy facing supply constraints. The CBR has warned that high budget expenditures are a key pro-inflationary risk, as they continue to outpace the economy's productive capacity.
• Labor Market Tightness and Wage Growth: Russia's labor market is exceptionally tight, partly due to mobilization and emigration, leading to labor shortages across various sectors. This tightness exerts upward pressure on wages, which businesses then pass on to consumers through higher prices. Sustained wage growth without corresponding productivity gains will continue to fuel inflation.
• Exchange Rate Volatility: While the ruble has stabilized somewhat after its initial depreciation following the 2022 invasion, it remains vulnerable to fluctuations in oil prices and geopolitical developments. A weaker ruble makes imports more expensive, leading to imported inflation, particularly for consumer goods and intermediate inputs. The CBR actively manages the currency, but external shocks can undermine its efforts.
• Inflation Expectations: High and entrenched inflation expectations among households and businesses pose a significant challenge for the CBR. If economic agents expect prices to continue rising rapidly, they may adjust their pricing and wage demands accordingly, creating a self-fulfilling prophecy. The CBR has noted that inflation expectations, while showing some varied changes, generally remain elevated, hindering a rapid decline in inflation.
• Monetary Policy Effectiveness: The Central Bank of Russia has maintained an exceptionally high key interest rate (currently 21.00% p.a.) to combat inflation. While this tight monetary policy is designed to cool demand and reduce inflationary pressures, its effectiveness can be challenged by the structural issues and the dominance of fiscal stimulus. The risk is that the CBR may need to maintain high rates for a prolonged period, potentially stifling economic growth, or that its efforts may be insufficient to bring inflation back to target within a reasonable timeframe.
• Global Commodity Prices: While Russia is a major exporter of energy and some commodities, it is also a net importer of various consumer goods and technologies. Fluctuations in global food prices, for instance, can directly impact domestic inflation, as evidenced by the significant contribution of food to the overall CPI.

Russia Inflation Data