Putin: Impact of higher VAT on price growth to be short-lived, inflation should slow down to 5% by end of 2026

MOSCOW. Feb 3 (Interfax) - The acceleration of price growth in Russia in January is not something unexpected, it is to do with the increase of VAT, overall this factor's impact on inflation will be short-term, Russian President Vladimir Putin said at a meeting on economic issues on Tuesday.

Russia's inflation in 2025 slowed down to 5.6%.

"As of January 26, it stands at 6.4% in annualized terms. This, too, is expected, including in relation to the reset of the fiscal system, in particular the VAT increase. By estimates of both the government and the Central Bank, i.e. dear colleagues, by your estimates, the impact from these changes on prices will be short-term," Putin said.

"At any rate, such was our practice before: we have seen it during the previous hike, that's how it happened. I repeat, we have the practice, and I suppose there is every reason to believe that it will be so now, too. We shall see, of course, but really the expectations are that this period will be short-term and by the end of year the inflation should again be down approximately to 5%," Putin said.