Inflation in Russia hits highest in more than 20 years

People walk past a currency exchange office screen displaying the exchange rates of the U.S. dollar and euro to Russian rubles in Moscow's downtown, Feb. 28. AP-Yonhap

Annual inflation in Russia accelerated to 17.49 percent as of April 8, its highest since February 2002 and up from 16.70 percent a week earlier, the economy ministry said Wednesday, as the volatile ruble sent prices soaring amid unprecedented Western sanctions.

Prices of nearly everything from vegetables and sugar to clothes and smartphones have risen sharply in recent weeks after Russia began what it calls "a special military operation" in Ukraine, Feb. 24.

The central bank warned Wednesday that consumer inflation in Russia will keep on accelerating in annual terms due to base effects, saying that ruble volatility will lead to upside inflationary pressure.

Weekly inflation in Russia slowed to 0.66 percent in the week to April 8 from 0.99 percent a week earlier, taking the year-to-date increase in consumer prices to 10.83 percent, data from statistics service Rosstat showed.

In the same period a year ago, consumer prices rose 2.72 percent.

In March, consumer prices in Russia jumped 7.61 percent, their biggest month-on-month increase since January 1999, as the economy took a hit from sanctions and a record fall in the ruble, which has pared its losses since then.

The central bank, which aims for annual inflation of 4 percent, cut its key rate to 17 percent from 20 percent Friday and said future cuts were possible.

Inflation in Russia could reach between 17 percent and 20 percent this year, Alexei Kudrin, the head of Russia's audit chamber, said. Analysts polled by Reuters in late March had on average forecast 2022 inflation to accelerate to 23.7 percent, its highest since 1999. (Reuters)