Putin’s war
Economist Hüther warns of hyperinflation in Russia
People in Moscow queue in front of an Alfa Bank ATM. Photo: Victor Berzkin/AP/dpa
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The sanctions against Russia are having a major impact in the country. The ruble is in a nosedive, there is a risk of gigantic price increases.
The economist Michael Hüther expects a drastic depreciation of the Russian currency in view of the Ukraine war.
“In Russia there is now a risk of a further fall in the value of the ruble and hyperinflation,” warned Hüther, director of the employer-related Institute of German Economics in Cologne (IW), in the newspapers of the Funke media group.
The Federal Agency for Civic Education (bpb) defines hyperinflation as inflation with gigantic price increases where the inflation rate is at least 50 percent. “In the case of hyperinflation, the circulation speed of money increases constantly, since everyone spends their money on goods as quickly as possible in order to forestall further price increases,” says the bpb lexicon.
Hüther even sees possible advantages in the current development for Germany and other countries. Because the crisis is also causing the share prices of Russian companies to collapse. “In view of the minimal prices, it could even be an opportunity for Western countries and companies to take over Russian companies and thus secure their own influence,” said Hüther. But therein lies the risk that Russia could nationalize these companies.