MOSCOW (AFP) – Russia’s state statistics service on Wednesday estimated annual inflation at 11.4 per cent for 2014, the highest level since the financial crisis of 2008.
The sliding ruble – hit by lower oil prices and Western sanctions – has significantly pushed up prices, with food up by 15.4 per cent for the year, it said.
Inflation crept up 2.6 per cent in December, a month when the ruble experienced a dramatic crash on December 18, falling by 20 per cent in a single day and triggering fears of a full-blown bank run.
The currency has stabilised over the past week between 50 and 60 rubles to the dollar – over 40 per cent weaker than at the beginning of the year.
Russia’s inflation in 2013 was 6.5 per cent.
The economy – sluggish for the past two years – was dealt a double blow this year as oil prices reached a five-year low and Western countries imposed sanctions over Moscow’s involvement in the conflict in Ukraine, cutting off Russia’s banking system from foreign lending.
As a result, the economy shrank in November for the first time in five years, and is expected to enter recession in the first quarter of 2015.
Russians’ real earnings also fell.