There are signs that Russia’s economy is overheating with annual inflation currently at 5.9%, Anton Siluanov, the country’s finance minister, said Thursday.
“If we continue with increased spending, what will we get? Overheating. Elements of overheating are already visible — high inflation,” Siluanov said at the St. Petersburg International Economic Forum, according to a Reuters translation.
Consumer price inflation accelerated again in May, rising from 5.5% in April. Earlier this week Russia’s Central Bank Governor Elvira Nabiullina told CNBC that “inflation is accelerating” and that, unlike elsewhere, inflation was not seen as a temporary issue as economies reopened and consumer demand increased.
Investors will be looking to the next central bank meeting on June 11 to see what it does next, with speculation mounting that the bank could hike interest rates by as much as 50 basis points from a current level of 5%. The central bank’s inflation target is 4%.
Nabiullina said the central bank would analyze all the factors, including the inflation forecast and the situation in the economy, but said that “we see the risk that our inflation expectations are elevated, and they remain elevated for several months.”
On Wednesday, Russia’s central bank issued a bulletin in which it noted that the economy was continuing to grow in the second quarter and that gross domestic product could reach its pre-pandemic level in mid-2021.
Reference: CNBC
Thai
Eng