According to insiders, Vladimir Putin is increasingly concerned about disruptions to the domestic economy. His frustration was evident during a meeting with company executives on December 16, several insiders told Reuters.
Putin scolded high-ranking business representatives. He was also visibly dissatisfied when he heard that private investment was being cut due to high financing costs.
High inflation has consequences for the Russian economy
Shortly afterwards, the president called for a “balanced interest rate decision” from the central bank. A day later – on December 20 – the country surprisingly left its key interest rate at 21 percent at its last monetary policy meeting of last year. Experts had expected an increase of up to 23 percent due to high inflation. Central bank chief Elwira Nabiullina subsequently denied giving in to political pressure.
Several MPs called for her replacement. According to two insiders, this is unlikely. “No one will change the central bank governor in such a situation,” said a person familiar with the matter. “Nabiullina’s authority cannot be denied, the president trusts her.” She has been the highest monetary authority since 2013. Her third term ends in 2027.
War economy in Russia for three years
After the attack on Ukraine almost three years ago, Russia switched to a war economy. Despite numerous Western sanctions, the country has grown significantly over the past two years due to massive arms spending. However, the domestic economy has been hit in recent months by labor shortages and interest rate hikes to combat inflation.
The situation could worsen if Trump comes to power
Part of Russia’s elite believes a negotiated solution to the war is desirable, two people familiar with Kremlin thinking said, given the tougher economic situation. This could get worse: new US President Donald Trump is threatening further sanctions and tariffs if Putin does not rely on a negotiated solution.
Source: Krone
I am Ida Scott, a journalist and content author with a passion for uncovering the truth. I have been writing professionally for Today Times Live since 2020 and specialize in political news. My career began when I was just 17; I had already developed a knack for research and an eye for detail which made me stand out from my peers.
