In July 2014, the Russian government forecast inflation would decrease progressively, creating more favorable conditions for consumption and investment. “Considering the inertia in our economy, and given that we had inflation of 6.5 percent last year, a slowdown (of inflation) is very probable,” said Economic Development Minister Alexei Ulyukayev at the time. Since then, the oil prices dropped by 60 percent and the national currency – the ruble (RUB) – lost 50 percent of its value against the US dollar (USD). “The knock-on effect (is) when a weakened or devalued national currency leads to more rapid inflation,” Ulyukayev added when the fall in oil prices had hardly started.
Now inflation has become the most urgent issue for the Russian economy and various estimates banked it will vary between 11 and 17 percent in 2015, at least similar to 2014’s. “Now it is important to curb the growth of inflationary expectations and stabilize inflation at lower levels, less than 10 percent and, I would say, 8 percent this year,” Russia’s Central Bank First Deputy Chief Kseniya Yudayeva stated. “We will certainly continue to fight inflation,” Prime Minister Dmitry Medvedev told the 6th Gaidar Forum, meaning the repeating of previous years’ efforts could help ease the situation. “It is largely thanks to these efforts that we are now able to support the economy, continue infrastructure projects and, of course, honor our social commitments,” Medvedev stressed.