Reasons for accelerating inflation in the Russian economy

The article shows that the increase in inflation in 2020-2024 is associated with the acceleration of the growth rate of the money supply. The main contribution to the growth of the monetary base was made by transactions with the National Wealth Fund, which were not sterilized. Following this, there was an acceleration in the growth rate of lending, supported by preferential programs and a decrease in the required reserve ratio, which was reflected in an increase in the credit multiplier. Accelerated growth in the money supply led to an increase in the growth rate of consumer prices. The current phase of the economic cycle, together with the labor shortage, is increasing inflationary pressure. Inflation growth could have been even greater if not for the increased demand for real cash balances and high rates of real GDP growth in 2023-2024. Along with a tight monetary policy, additional measures to reduce inflation may include slower indexation of regulated prices and excise rates; limiting the growth rate of the consumer and auto loan portfolio of commercial banks; increasing reserve requirements for them.