Russia’s Inflation Rate YoY: November 2025 Analysis and Macro Outlook
Table of Contents
Russia’s inflation rate YoY for November 2025 was reported at 7.70%, down from 8.00% in October and well below the 10.30% peak recorded in April. This data, sourced from the Sigmanomics database, signals a steady but gradual easing of inflationary pressures after a volatile year marked by supply disruptions and geopolitical tensions.
Drivers this month
- Energy prices stabilized, contributing -0.30 percentage points (pp) to the inflation decline.
- Food inflation slowed to 9.20% YoY from 10.10% last month, easing core pressures.
- Services inflation remained sticky at 6.50%, reflecting wage growth and rent costs.
Policy pulse
The current inflation rate remains nearly double the Central Bank of Russia’s 4% target. The bank’s key rate stands at 8.50%, unchanged since September, signaling a cautious stance amid persistent inflation risks and fragile growth.
Market lens
Immediate reaction: The RUB/USD exchange rate appreciated 0.40% within the first hour post-release, reflecting relief over easing inflation. Russian 2-year government bond yields fell by 12 basis points, signaling improved market sentiment.
Inflation is a key macroeconomic indicator reflecting price stability and purchasing power. Russia’s 7.70% YoY inflation contrasts with a 12-month average of 9.20%, showing a meaningful deceleration. However, it remains elevated compared to pre-2025 levels, which hovered near 4.50% in 2024.
Monetary policy & financial conditions
The Central Bank of Russia has maintained a tight monetary policy stance since early 2025, with the key interest rate at 8.50%. Financial conditions remain moderately restrictive, balancing inflation control with growth support. Credit growth slowed to 4.10% YoY in Q3 2025, reflecting cautious lending amid inflation uncertainty.
Fiscal policy & government budget
Fiscal policy remains conservative, with a budget surplus of 1.20% of GDP in Q3 2025. Government spending prioritizes social support and infrastructure, but limited fiscal stimulus constrains demand-driven inflation pressures. The ruble’s stability supports fiscal revenues denominated in local currency.
External shocks & geopolitical risks
Ongoing geopolitical tensions and sanctions continue to pressure supply chains and trade flows. Energy export revenues remain a critical buffer, but volatility in global commodity markets poses downside risks to inflation and growth.
Drivers this month
- Food inflation decelerated by 0.90 pp to 9.20% YoY.
- Energy prices stabilized, contributing to a 0.30 pp reduction in headline inflation.
- Services inflation remained steady at 6.50%, limiting further declines.
Policy pulse
The inflation rate remains above the 4% target, justifying the Central Bank’s cautious hold on interest rates. Market expectations for rate cuts have been pushed into mid-2026, reflecting ongoing inflation risks.
Market lens
Immediate reaction: The RUB strengthened modestly against the USD, while 2-year government bond yields declined by 12 basis points, signaling improved investor confidence in inflation control.
This chart highlights a clear downward trend in inflation since April 2025, reversing the prior upward surge. The moderation suggests that monetary policy and supply adjustments are gradually restoring price stability, though risks remain from core inflation components and external shocks.
Looking ahead, Russia’s inflation trajectory will depend on several factors including monetary policy adjustments, fiscal discipline, and external developments. The Central Bank is likely to maintain a cautious approach, balancing inflation control with growth support.
Bullish scenario (20% probability)
- Global commodity prices stabilize or decline, easing cost-push inflation.
- Monetary policy remains effective, pushing inflation toward the 4% target by Q3 2026.
- Geopolitical tensions ease, improving trade and investment flows.
Base scenario (60% probability)
- Inflation gradually declines to 5.50%-6.00% by mid-2026.
- Monetary policy remains steady, with rate cuts delayed until late 2026.
- Fiscal policy remains conservative, limiting demand-driven inflation.
Bearish scenario (20% probability)
- Geopolitical shocks or commodity price spikes push inflation above 8%.
- Monetary tightening intensifies, risking growth slowdown or recession.
- Supply chain disruptions persist, keeping core inflation elevated.
Russia’s inflation rate easing to 7.70% YoY in November 2025 signals progress but not victory. Persistent core inflation and external risks require vigilant monetary and fiscal management. Markets have responded positively but cautiously, reflecting uncertainty ahead. The balance of risks suggests a gradual disinflation path, with potential volatility from geopolitical and commodity market developments.
Investors and policymakers should monitor inflation components closely, especially services and wage growth, to gauge the durability of this easing trend. The interplay between monetary policy, fiscal discipline, and external shocks will shape Russia’s macroeconomic stability in 2026.
Key Markets Likely to React to Inflation Rate YoY
Russia’s inflation rate influences multiple asset classes, including equities, currency, and bonds. Key markets to watch include the Russian ruble, government bonds, and select stocks sensitive to inflation and monetary policy shifts. These markets historically track inflation developments closely, providing early signals of economic shifts.
- RUBUSD – The ruble’s exchange rate typically strengthens with easing inflation and stable monetary policy.
- SBER – Russia’s largest bank, sensitive to interest rate changes and economic growth.
- GAZP – Gazprom, linked to energy prices and export revenues affecting inflation.
- BTCUSD – Bitcoin, often viewed as an inflation hedge, reacts to macroeconomic uncertainty.
- EURRUB – Euro-ruble pair, reflecting cross-border trade and geopolitical risk sentiment.
Inflation Rate vs. RUBUSD Since 2020
Since 2020, Russia’s inflation rate and the RUBUSD exchange rate have shown a negative correlation. Periods of rising inflation often coincide with RUB depreciation due to real income erosion and monetary tightening. The recent easing of inflation to 7.70% YoY has supported a modest ruble appreciation, consistent with historical patterns.
FAQ
- What is the current inflation rate YoY for Russia?
- The latest inflation rate YoY for Russia is 7.70% as of November 2025, down from 8.00% in October.
- How does the inflation rate affect Russia’s monetary policy?
- Inflation above the 4% target keeps the Central Bank cautious, maintaining higher interest rates to control price pressures.
- What are the main risks to Russia’s inflation outlook?
- Key risks include geopolitical tensions, commodity price volatility, and persistent core inflation in services and wages.
Takeaway: Russia’s inflation is easing but remains elevated, requiring careful policy calibration amid external uncertainties.
This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.
Russia’s inflation rate YoY declined to 7.70% in November 2025, down from 8.00% in October and well below the 10.30% peak in April. The 12-month average inflation rate stands at 9.20%, indicating a sustained easing trend over the past six months.
This downward trajectory reflects easing food and energy price pressures, alongside tighter monetary policy. However, core inflation components such as services remain elevated, suggesting persistent underlying inflationary momentum.