In response to ongoing sanction pressure and a fragile global price environment, a tight fiscal stance is being urged to prevent inflation from picking up speed. This stance was emphasized by Anton Siluanov, the Finance Minister of Russia, during a keynote at the VIIIth Anniversary Forum of the Financial University. The event, titled “Russia and the world: new walls or new rules?” brought together policymakers and experts to discuss the path forward for Russia’s economy under current external constraints. The minister underscored a clear priority: safeguard social programs, defend national security, and support strategic development while keeping a disciplined approach to public finances. He signaled that prudent fiscal management must align with the central bank’s efforts to stabilize prices, stressing that inflation control requires conservative budgeting, even amid elevated defense and social spending needs.
Siluanov asserted that, given the present constraints, government resources must be allocated with utmost care. He pointed out that the state faces a set of competing demands, and a responsible fiscal policy is essential to sustain essential services, invest in long-term development, and maintain macroeconomic stability. The minister reiterated that inflation is a threat that cannot be ignored, and a cautious policy mix is necessary to avoid reinforcing price pressures. He acknowledged the central bank’s role in this balancing act and called for continued policy alignment across fiscal and monetary authorities to prevent any resurgence of price spirals that could erode household purchasing power.
During the discussion, Siluanov referred to the central bank’s ongoing efforts to steer inflation toward the target range, noting that the current interest rate stands at a high level as a tool to anchor expectations. He remarked that such measures, while painful in the short term, are intended to shield the economy from persistent inflation and to create a stable environment for business investment and long-term planning. The Ministry of Economic Development has projected a target inflation path for the year ahead, outlining expectations that the rate may land around mid-single digits by year-end, contingent on external conditions and the effectiveness of policy transmission. In parallel, the central bank’s own forecasts anticipate inflation staying within a similar corridor, underscoring a consensus that price growth should decelerate gradually as policy takes hold.
Earlier remarks from the central bank’s leadership highlighted the social costs of inflation. The governor acknowledged that a percentage point change in inflation can affect the daily lives of citizens, influencing everything from household budgets to wage negotiations. The emphasis was on a transparent policy framework that communicates credible expectations and reduces volatility in inflation trajectories. This approach fosters confidence among households and businesses, enabling more stable economic planning and prudent consumption. In this context, the central bank has underscored the importance of structural measures and credible communications to maintain public trust as the economy adjusts to evolving sanctions and external dynamics.
Looking back, the central bank reported a rise in inflation expectations among Russians in the months prior, highlighting the challenges of anchoring inflation expectations amidst external shocks. The interplay between monetary policy actions and fiscal discipline remains critical as the economy navigates sanctions, global commodity price shifts, and domestic investment needs. Policymakers stress that a coordinated framework—where fiscal restraint supports monetary credibility and vice versa—offers the most reliable path toward price stability, social resilience, and sustainable growth for the country. As authorities continue to calibrate policy levers, the overarching aim remains clear: to shield citizens from inflation’s adverse effects while preserving the long-term vitality of Russia’s economy.