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Russian VAT Hike to Push Inflation Above Target in 2019

Russian Prices

President Vladimir Putin wants to invest in Russia’s economy, and a planned hike in value-added tax should bring in 600 billion rubles ($9.5 billion) a year to do it. It’s also likely to push inflation above the central bank’s target of 4 percent, which in turn would squeeze consumer demand, according to Bloomberg Economics. The threat to inflation expectations could keep policy on hold through 2018.