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Russia's 2014 inflation at 11.4%, highest since 2008

AFP , Wednesday 31 Dec 2014
A trader attends to a customer at her stall in a market in St. Petersburg June 2, 2011. CREDIT: REUTERS

Russia's state statistics service on Wednesday estimated annual inflation at 11.4 percent for 2014, the highest level since the financial crisis of 2008.

The sliding ruble -- hit by lower oil prices and Western sanctions -- has significantly pushed up prices, with food up by 15.4 percent for the year, it said.

Inflation crept up 2.6 percent in December, a month when the ruble experienced a dramatic crash on December 18, falling by 20 percent in a single day and triggering fears of a full-blown bank run.

The currency has stabilised over the past week between 50 and 60 rubles to the dollar - over 40 percent weaker than at the beginning of the year.
Russia's inflation in 2013 was 6.5 percent.

The economy - sluggish for the past two years - was dealt a double blow this year as oil prices reached a five-year low and Western countries imposed sanctions over Moscow's involvement in the conflict in Ukraine, cutting off Russia's banking system from foreign lending.

As a result, the economy shrank in November for the first time in five years, and is expected to enter recession in the first quarter of 2015. Russians' real earnings also fell.

Analysts predict that Russia's recession will last all of next year. President Vladimir Putin this month conceded tough times were ahead and did not issue any roadmap for recovery, merely saying that the economy will rebound by 2017 in line with global trends.

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