Russia’s VAT Hike to Fund Defense Spending Expected to Increase Inflation by 1% Next Year

• Russia plans to raise VAT to fund defense spending, which may increase inflation by 1% next year.
• The VAT rate is proposed to rise from 20% to 22% to address a budget deficit.
• The overall inflation impact could be around 1.5% as companies adjust prices.
• High interest rates affect corporate profits despite slowing inflation.
• The Central Bank aims to stabilize inflation before further rate cuts.

Source: themoscowtimes.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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