- Putin ordered a partial mobilization of military reservists on September 1, prompting many to flee.
- Russia’s top central banker Nabiullina has warned of an increase in inflation due to Putin’s military draft.
- She stated that the draft could cause structural changes in labor markets, which could lead to higher labor costs.
Russia’s top central banking official has warned about worsening inflation and structural changes in the country’s labor market, thanks to President Vladimir Putin “partial mobilization”of September’s military reserveists.
Elvira Nabiullina (Bank of Russia Governor) stated that in a Friday StatementAccording to the call-up, it is a “new” factor that affects price trends. It also refers to a deep transformation in Russia’s economic system.
Nabiullina indicated that Putin’s draft might lower prices in near-term due to falling consumer demand, but could start rising later because of “changes in structure of the labour market or a shortage in some specialists.”
This assessment was made by the country’s top central banker, as the bank had a key interest rate of 7.5%. It had been cut six times in the past year. The bank had Rates increased to 20%Just days after the invasion, Ukraine was infected. According to the Russian central bank, the country’s inflation rate will reach 12%-13% by 2022.
Putin’s partial mobilisation order has caused havoc among Russians and sent many Fight the draft. Reports Nearby countries put the number at more than 300,000, according to a Washington PostReport October 16.
Nabiullina, despite negative consequences from Putin’s draft being published, said that her pessimistic outlook on the economy was tempered by the fact that the economy has been “adapting to external restrictions more quickly” partly due to record farm harvests.
Nabiullina’s statement came after Bank of Russia researchThe country’s economic activity was at a standstill in September, as evidenced by the data. The economic activity had seemed to be stabilizing after the sweeping sanctions imposed on Ukraine over the war. firm energy prices.
In a report last Wednesday, the central bank’s research unit warned of further impact from Putin’s draft, as it could make it harder for companies to hire in Russia — where Record low unemployment — in turn, “holding back overall economic activity in the coming months.”
