The specter of the inflationary spiral is pointing its nose in Russia against a backdrop of geopolitical tensions and sluggish growth. If the return of inflation is a global concern, Russia is one of the countries where the trauma of the hyperinflation of the 1990s remains fresh in the memories and where the ruble is frequently devalued.
Today, inflation rhymes with sanctions and tensions. New US sanctions imposed on April 15 and the noise of Russian boots on Ukraine’s borders further plague an economy still dependent on oil rents and whose growth has been sluggish since 2013.
Contained at an annual rate of between 2 and 4% for five years, inflation has been showing signs of runaway since last December (4.9% on an annual basis), jostled by the soaring prices of basic foodstuffs. Main troublemaker: sugar, whose prices have jumped 70% in one year, followed by sunflower oil (+ 27%). As a matter of urgency, the government capped the prices of these two commodities in December and imposed restrictions on grain exports. Suddenly, several large international traders active on the Russian market, including the Genevan Sierentz Global Merchants, have packed their bags.