Inflation Wildfire Consuming Russia Spreads to More Basic Goods
Bloomberg News
March 23, 2022, 12:00 PM EDT
The inflation shock upending Russia’s economy has shown little sign of letting up, increasingly spreading to basic goods from onions to tea after supply disruptions and the ruble’s collapse that followed the invasion of Ukraine.
…”Domestic demand will fall sharply,” the Institute of International Finance said in a report. “The impact on imports will be largest, as the significantly weaker ruble drives up prices and both households and corporates are struggling to acquire sufficient foreign exchange.”
Inflation is galloping toward levels not seen in over two decades, made worse by the exodus of dozens of foreign companies from carmakers to banks after international sanctions imposed on Russia. The ruble has meanwhile lost about a quarter of its value against the dollar so far this year, sending the cost of imported goods soaring.
Economists predict a double-digit drop in output this year, while the ruble’s collapse and shortages of goods may touch off inflation of as much as 25%, a level not seen in Russia since the government’s 1998 debt default.
https://www.bloomberg.com/news/articles/2022-03-23/inflation-wildfire-consuming-russia-spreads-to-more-basic-goods
If I were head of the Russian Central Bank, I too would want to resign.
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