Elvira Nabiullina, the Governor of the Bank of Russia, addressed the State Duma committees regarding the draft Monetary Policy Guidelines for 2025–2027. In her speech, she acknowledged ongoing economic challenges and outlined measures to stabilize inflation and ensure sustainable growth.
Nabiullina emphasized that a monetary tightening cycle has begun in response to rising inflationary pressures. "Businesses are concerned about the implications for investment, production capabilities and economic growth – and this is what Alexander Zhukov wants us to focus on," she stated.
She detailed recent inflation trends, noting that "current monthly inflation...peaked at 10–12%." Despite efforts to control it through rate hikes, including raising the key rate to 16%, inflation remains a concern. She cited several factors contributing to this situation: "core inflation and the inflation expectations of both households and businesses were up," consumer activity showed no signs of cooling, labor shortages persisted, and external conditions worsened due to sanctions.
Addressing these issues requires maintaining tight monetary policy. Nabiullina highlighted the need for such measures by stating that "high inflation thwarts sustainable economic growth" and can lead to unpredictability. The central bank's goal is price stability with an annual target of around 4%.
She acknowledged concerns over high interest rates potentially stalling lending or failing to curb inflation effectively. However, she argued that corporate lending continues robustly despite rate increases: "Corporate lending is continuing to grow rapidly...the annualised growth rates are very high."
To achieve balanced economic development amid constraints like labor shortages, Nabiullina stressed enhancing productivity rather than relying solely on credit expansion. She also discussed potential government support mechanisms beyond subsidized loans.
Concluding her address, Nabiullina reaffirmed commitment to controlling inflation while supporting economic objectives aligned with governmental goals: "Tight monetary policy is consistent with all the objectives for economic development that the Government is currently working on."