Russia Faces Highest Consumer Price Pressure Since Pandemic Era

Russia may face a peak surge in consumer prices next year, Dmitry Pyanov, First Deputy Chairman of VTB said. According to him, inflationary pressure will intensify rapidly and that the country has little time left before a new wave of price hikes begins in the first quarter of 2026.

Analysts Expect Inflation to Break Past Five Percent

Pyanov suggested that inflation will exceed five percent, adding that the Central Bank is unlikely to keep its long-standing four-percent target intact under current conditions. The policy debate of 2025, he noted, has already shifted away from rigidly defending the target at any cost. Instead, policymakers now argue that the target should only be pursued so long as it does not trigger a recession.

“One of the macroeconomic outcomes of 2025 has been the shift from uncompromisingly fighting inflation to realizing that the target must not be achieved at the price of a recession,” said Dmitry Pyanov.

Despite mounting price pressure, Pyanov expects Russia’s GDP growth this year to hover around one percent.

Inflation Falls Below Seven Percent but Remains Elevated

By late November 2025, annual inflation fell to 6.92 percent. Even so, the current pace of consumer price growth remains well above the Central Bank’s target. Prices rose 0.4 percent in the first weeks of November, 0.14 percent over the latest week, and 5.23 percent since the start of the year.

Food prices increased by 0.16 percent over the week, though excluding fruit and vegetables — which jumped by 1.3 percent — food inflation stood at 0.06 percent. At the same time, prices declined for sugar, meat, pasta, cheese, and eggs.

Non-food products rose by 0.08 percent, while gasoline became cheaper by 0.26 percent and construction materials by 0.04 percent. Clothing and footwear saw modest weekly increases of 0.1 and 0.2 percent.

Central Bank Warns Rate Cuts Will Be Limited

The Central Bank has repeatedly emphasized that inflation dynamics remain the decisive factor in any discussion of lowering the key rate. Regulators will only move toward significantly softer monetary policy if inflation firmly converges toward the target.

Earlier, Central Bank Deputy Chairman Aleksey Zabotkin cautioned that under current conditions, the key rate is unlikely to fall below ten percent in 2026.