Russian Inflation Hits 11.4%

Russia’s annual inflation for 2014 will hit about 11.4%, according to initial estimates, driven higher by the plunging value of the rouble.

The currency’s falling value has pushed up prices, particularly of food, which rose about 15.4% during the year.

The state statistics service Rosstat said that consumer prices rose 2.6% in December, a month when the rouble suffered some of its steepest falls.

Meanwhile, Russia has intervened to support another bank, Gazprombank.

In 2013, the annual inflation level was 6.5%. The 2014 inflation figure is the highest since Russia’s financial crisis in 2008.

Lower oil prices and Western sanctions imposed over Ukraine have driven down the value of the rouble, meaning that the price of many goods – especially imports – have risen.

Rosstat said that the price of non-food products rose by 8.1% during 2014, while service charges went up by 10.5%.

Rosstat is due to publish final inflation data on 12 January.

Russia’s economy shrank in November for the first time in five years, and is expected to enter recession in the first quarter of 2015.

via BBC

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