The Russian rouble has taken a large hit this past year, with one U.S. dollar buying 100 of them. With inflation rising and growth slowing, the invasion of Ukraine hurt the economy in the short run before a minor recovery. Since then, policymakers have enacted a plan to fight against inflation and keep consumers invested in the financial system. The increase in government spending parried inflation, which raised the rouble to 135 to the U.S. dollar, before dropping to the current 100 equivalent. The country also saw a large profit from gas and oil exports, in which U.S. consumers saw a rise in price.
Most of Russia's population is a part of the labor force, so the ministry has voted to raise Social-Security spending in hopes of increasing investment. However, Russian citizens have been seeing a 5.5% increase in consumer prices in the past year likely as a result of wages increasing and firms having to cover salary expenses with higher prices. The rise in inflation is expected to continue through 2023.
To fight these effects of inflation, Vladimir Putin could cut government spending on military and defense - but that is very unlikely according to his 2024 planning. Alternatively, they could raise gas prices, but the effect on America's consumption could prove devastating to the Russian economy as American sales would drop in reaction to the price change.
https://www.economist.com/finance-and-economics/2023/09/28/the-costs-of-russias-war-are-about-to-hit-home
The last post I read was about how Ukraine was fairing during this conflict, and its really good to see that this is hitting Russia in their wallets harder than it is hitting Ukraine. The last time I looked at the USD to ruble inflation rate some time during my junior or senior year of high school I remember it being roughly 75 rubles to 1 USD. Its crazy to see that in the last few years it has almost halved in value before dropping down to a rate that is still roughly 50% of what it was just a few years ago.
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