Inflation in Russia accelerated again in May, as officials warned that massive public spending to support the military offensive on Ukraine was worsening the economy.
Increases in government spending have supported the Russian economy in the face of a barrage of Western sanctions, but have also led to higher prices and labor shortages in many sectors unrelated to the campaign.
The inflation rate reached 8.3% year-on-year in May. Russian statistics agency Rosstat He said on Friday — Highest rate since February 2023.
That was up from 7.8% at the end of April and well ahead of the country’s official figure Inflation target is 4.0%.
The rapid rise in prices put pressure on the Russian Central Bank to continue raising interest rates to control inflation.
Last week, he kept the key interest rate at 16%, but indicated that he may raise borrowing costs in the future if the pace of price increases does not slow.
German Gref, CEO of state-run Sberbank, warned last week that Russia’s growth was “fragile” because it relied on government spending to keep paying wages and consumer spending, not on investment or gains in productivity.