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British Intel: War against Ukraine likely to negatively impact outlook of Russian economy

A view of St. Basil’s Cathedral at the Red Square in Moscow on 17 March 2020. Source: Sefa Karacan/Anadolu Agency

Russia’s war against Ukraine is highly likely to negatively impact the outlook for the Russian economy, an intelligence update by the UK Defense Ministry has suggested.

“Imports have risen faster than exports, likely contributing to the rouble depreciating since the start of the war – highly likely a driver of inflation. As Russia ramps up its defense spending at the cost of other areas, the risk of the Russian economy overheating remains likely,” the British intelligence said on X.

According to the update, Russia’s Central Bank has increased its interest rate by 1% to a new base rate of 16%.

“This is the fifth increase since the current cycle of rises began in July 2023, when the base rate was set at 6.5%,” the UK Defense Ministry informed.

Russian inflation continued to accelerate until the end of 2023, rising to 7.5% year-on-year in November, up from 6.7% in October. Overall, inflation for 2023 is estimated to be 7.4, nearly double the Central Bank’s target.

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