Russian Central Bank head warns of inflation surge in Russia

Viktor Volokita - 19 December, 19:21

Elvira Nabiullina. Photo: Getty Images

Russia's economy is expected to experience accelerated inflation at the beginning of 2026, driven by higher tariffs and an increase in the value-added tax (VAT).

Source: Elvira Nabiullina, Head of the Central Bank of Russia, at a press conference on Friday 19 December, as reported by The Moscow Times, an independent Amsterdam-based news outlet

Details: Nabiullina said that this year price growth in Russia slowed to a five-year low, falling below 6%.

However, "the VAT increase may significantly affect prices in the coming months," she noted.

"Some companies have begun adjusting prices with this in mind in December, but the main impact is still ahead," Nabiullina said, adding that cuts to the key interest rate would not proceed "on autopilot".

Background: On Friday, the Russian Central Bank cut its key rate for the fifth time this year, from 16.5% to 16%. However, Nabiullina said that keeping the rate unchanged had also been considered. In addition to VAT, the Central Bank sees inflation risks stemming from oil prices, which for Russian blends have fallen below US$40 per barrel. This "may have pro-inflationary effects through rouble exchange rate dynamics," the regulator said.

Support Ukrainska Pravda on Patreon!