Russian inflation is raging at 60%, not the reported 3.6%, thanks to the ruble's 'freefall'

businessinsider: Russia could be grappling with an unreported inflation crisis as its war with Ukraine rages on, if the estimates of top economist Steve Hanke are any guide.

Based on his own calculations, Hanke gauged the Russia's annual rate of consumer-price increases at an eye-watering 60%, far above the 3.6% level most recently reported by the Bank of Russia.

"According to the Central Bank of the Russian Federation, Russian inflation expectations jumped to 11.1% in July. Today I measure inflation at 60%/yr, ~5.5x the central bank's data point. The expectations appear to be way too optimistic," the economist said in a tweet.

"The ruble's FREE-FALL is fueling RAGING INFLATION in Russia," the applied economics professor at Johns Hopkins University said in an earlier tweet.

A weakening currency tends to stoke inflationary pressures because it drives up the costs of imported goods.

Just last week, Russia's central bank raised benchmark interest rates by a whopping 100 basis points to 8.5% in a bid to rein in consumer-price pressures.

"Inflation expectations have risen. Domestic demand trends and the depreciation of the ruble since the beginning of 2023 significantly amplify pro-inflationary risks," the Bank of Russia said.

Soaring inflation is just one of many problems battering Russia's economy. From a dramatic collapse in its current-account surplus, to a plunging Russian ruble and slumping car sales, the country's troubles are numerous.

Moscow's economic challenges have been mounting since the start of its war with Ukraine, amid a wave of Western sanctions that were imposed on the country in retaliation for its invasion.