INSUBCONTINENT EXCLUSIVE:
from businesses and banks that the economy is slowing.Inflation has surged across the Russian economy in recent months, fueled by soaring
government spending on the war in Ukraine and acute labor shortages.The high lending rates have put increasing pressure on businesses, with
to justify a rate cut.While the central bank targets inflation at 4%, it does not expect to reach that level until 2026, with average
oil prices, sluggish industrial output and the drag of high interest rates.In a March research note, Raiffeisenbank Russia said confidence
strong growth in 2024, driven largely by soaring defense spending, which is set to rise by nearly 30% again next year.But analysts caution
that war-driven growth is unsustainable and does little to boost real productivity
Some also question the effectiveness of rate hikes in curbing inflation, given that much of the current spending is state-driven and less
sensitive to interest rates.
