The Nature of Inflation in the Modern Russian Economy and Its Impact on Economic Growth

The article analyzes the situation in the Russian economy after the annual cycle of increasing the key rate in 2023–2024. It is shown that the key factors in accelerating price growth were the shift in the production structure that occurred in 2022–2024 and the associated imbalance in supply and demand. Against this background, the tightening of monetary policy had only a limited impact on price dynamics, which is typical not only for the Russian economy, but also for the economies of many countries around the world. The only factor that can change the situation on the domestic market could be an increase in supply, which is impossible with a low level of investment activity. Excessive monetary policy tightness in these conditions could halt the investment cycle in most sectors and lead to economic stagnation. An alternative is to revise inflation targets and implement a program to reduce inflation over a 3–5 year horizon.