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The Russian Central Bank lowered its key interest rate for the third time in 2026 and eighth time in the last 12 months while continuing attempts to portray the Russian economy as stable. The Russian Central Bank announced on April 24 that it lowered its key interest rate from 15 to 14.5 percent. The Russian Central Bank previously lowered the key interest rate on February 13 and March 20, 2026. The Russian Central Bank claimed that Russian unemployment remains at historic lows and that wage growth continues to outpace productivity growth. The Russian Central Bank claimed that Russia’s annual inflation as of April 20 was 5.7 percent. The Russian Central Bank acknowledged that the Russian economy slowed and that core inflation rose in the first quarter of 2026 but claimed that the rise in inflation was due to “one-off factors.” Russian Central Bank Chairperson Elvira Nabiullina stated on April 24 that the Russian Central Bank slightly raised its average key rate forecast range for 2026 to 14 to 14.5 percent from 13.1 to 14.3 percent, as inflationary risks “significantly” increased due to the conflict in the Middle East and potential changes to Russia’s fiscal policy. The Russian Central Bank also adjusted its forecast for the price of oil per barrel in the medium term to $65 from $45 — likely in response to global oil price spikes throughout March and April 2026. Elevated Russian oil revenues may enable the Kremlin to continue to finance its war against Ukraine in the medium term but are unlikely to reverse the years of poor economic policy.
The Russian economy continues to struggle under the strain of immense war spending, however. Russia’s extremely low unemployment rate reflects the fact that Russia is experiencing labor shortages and is likely causing wage inflation in the civilian and defense sectors, contributing to overall inflation. Russia’s inflation rate is also likely much higher than the Central Bank claims, with grocery prices rising in the early months of 2026. Russia is incurring high levels of external debt and has gradually depleted its liquid reserves to fund its war in Ukraine, ignoring the long-term economic implications of the Kremlin’s economic policies. Russian business newspaper Vedomosti reported on April 23 that the number of planned layoffs in Russia increased by 43 percent since June 2025, amounting to 105,147 as of April 1. Oleg Sokolov, an official from the Federation of Independent Trade Unions of Russia, told Vedomosti that insufficient funds caused by federal and regional deficits could be driving the layoffs. Ukraine’s Foreign Intelligence Service (SZRU) reported on April 23 that Russia’s federal deficit reached 4.6 trillion rubles (roughly $61 billion) in the first quarter of 2026 — significantly more than its planned 3.8 trillion rubles (roughly $50 billion) deficit for all of 2026. Russia has steadily depleted its sovereign wealth fund’s liquid reserves in order to fund the war and had to resort to selling its physical gold reserves in November 2025 due to unsustainable spending. Russia also raised its value-added tax (VAT) from 20 to 22 percent as of January 1, 2026, in an attempt to buttress federal budget deficits from unsustainably high defense spending, placing the burden of Russian President Vladimir Putin’s costly war in Ukraine directly on the Russian population.
Polls from both Russian state-owned and independent institutions continue to acknowledge growing societal discontent with Russian President Vladimir Putin, likely due to the mounting war sacrifices for the Russian people and the Kremlin’s intensified censorship campaign. Russian state-owned polling institution All-Russian Public Opinion Research Center (VTsIOM) published on April 24 the results from a poll for the week of April 13 to 19, indicating that Putin’s approval rating declined for the seventh week in a row from 66.7 percent during the week of April 6 to 12 to 65.6 percent during the week of April 13 to 19. VTsIOM polling also indicates that trust in Putin fell to 71 percent during the week of April 13 to 19, down from 72 percent during the week of April 6 to 12. A source from an unspecified government-associated media organization told Russian opposition outlet Meduza that the Russian Presidential Administration’s political bloc advised Russian state media to either cite Putin’s more favorable approval rating from the Kremlin-linked Public Opinion Forum (FOM) or omit reports with polling data entirely. FOM’s most recent polling data found that Putin’s approval rating was around 76 percent during the week of April 17 to 19 — a difference of almost ten points compared to VTsIOM’s polling in a similar time frame. FOM data similarly indicates a medium-term decline in Putin’s approval rating, however, with FOM polls showing Putin’s approval rating between 75 and 76 percent as of late April 2026, down from 78 to 80 percent in February 2026.
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