Russia Suffers Stagflation – Central Bank

Russia is suffering from stagflation, a combination of stagnant economic growth and a high rate of inflation, the first deputy chairwoman of Russia's Central Bank said Wednesday.

"Basically, there is a group of countries with developing economies, including Russia, that face the problem of stagflation: slowing economic growth accompanied by a spike in inflation," Ksenia Yudayeva told the annual Gaidar Economic Forum in Moscow, cited by RIA News Agency.

Russia's gross domestic product last year increased by an estimated 1.4%, its lowest level since the 2009 recession.

Inflation in Russia has remained high in the last years. Despite an inflation-targeting policy, the Central Bank failed to keep consumer price rises within certain margins in both 2012 and 2013.

Economic Development Minister Alexei Ulyukayev warned on Wednesday that Russia's average annual economic growth rate over the next two years would not exceed 2.5%..

Ulyukayev told reporters that stagflation was an appropriate term to use in Russia today, RIA News  reported.

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