Inflation in Russia significantly exceeds official figures: food prices have risen by 25% – ISW

The actual inflation rate in Russia is significantly higher than what Russian dictator Vladimir Putin publicly claims. In particular, food prices have risen by approximately 25%.

This is stated in a report by the Institute for the Study of War (ISW).

Analysts emphasize that the Kremlin continues to try to conceal or downplay the economic consequences of the full-scale war against Ukraine, Western sanctions, and miscalculations in its own economic policy.

Putin recently acknowledged that Russia’s gross domestic product growth in 2025 would be only 1%, compared to 4.1% in 2023 and 4.3% in 2024. At the same time, he called this slowdown “artificial” and attributed it to the government’s supposedly targeted efforts to curb inflation.

According to the dictator, inflation in Russia would fall to 5.6% by the end of 2025, after peaking at 9.6% in 2024. However, Putin acknowledged that inflation had already risen to 6.4% year-on-year by January 2026. He attributed this to the increase in value-added tax from 20% to 22% effective January 1, 2026.

ISW notes that the VAT increase was likely a measure to cover the federal budget deficit caused by excessive defense spending. Effectively, the financial burden was transferred to the Russian population.

Analysts have recorded a sharp rise in food prices – up to 25% both before and after the VAT increase. This, according to ISW, indicates that the actual inflation rate in Russia significantly exceeds the Kremlin’s official figures.

“The systematic distortion of inflation data is aimed at creating the illusion that the war against Ukraine and Western sanctions are not damaging the Russian economy,” the analysts concluded.

As a reminder, US President DonaldTrump has voiced the idea of a global redistribution of spheres of influence between the US, China, and Russia , changing the traditional American policy of containment. This entails a softer policy toward Beijing and possible recognition of Russia’s territorial gains in Ukraine.

Incidentally, Russia and China are actively taking advantage of Donald Trump’s desire to conclude quick agreements and are attempting to weaken American alliances in Europe and Asia.

It was previously reported that China had begun building its own “shadow fleet” of gas tankers , which would allow the country to import sanctioned Russian liquefied gas.

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