Russian inflation accelerates to 8.6% in June

A woman buys vegetables at the food market in Moscow on April 29, 2022. (Photo by Natalia KOLESNIKOVA / AFP)

Moscow, Russia — The pace of price rises across the Russian economy accelerated in June, official inflation data released Wednesday showed, increasing the chances of an interest rate hike later this month.

Huge government spending to support the military offensive in Ukraine has helped Russia record unexpectedly strong growth, but has also pushed prices higher.

Annual inflation for June came in at 8.6 percent, the state’s Rosstat statistics agency said Wednesday, up from 8.3 percent in May.

READ: Russian inflation rose once again in May

That was the highest reading since February 2023.

Moscow officially targets an inflation rate of 4.0 percent and has already raised interest rates to 16 percent in a bid to stop the economy further overheating.

Central Bank governor Elvira Nabiullina signalled last week a further rate rise was likely when the bank meets on July 26.

“I think the main subject of discussions will be the step of the rate hike,” she told an economy forum.