However, the German Minister of Finance noted that the Government of Russia was able to meet projected 14-percent inflation targets.
Since deflation seems to be everywhere how does Russia have inflation? Is it because some prices were very cheap due to state subsidies which have been lifted? Does it cost a lot to borrow money? --------------- I don't know why Russia has inflation, but it certainly does. It may be in part due to state subsidies being lifted; subsidies on utilities are being slashed. My electricity bill tripled last month. Damn that Mayor Luzhkov!
Borrowing money is difficult, because you can only use your legal income -- which is usually just a fraction of your shadow income -- as collateral. Which means people who actually earn $2,000 a month but officially only earn $100 -- and this is not uncommon -- get classified as non-loanworthy. It's for this reason that some people are pushing to permit the registration of "fuzzy" income. One of those many things that would be perverse in most Western countries but make sense here (like the government declaring an amnesty on 90s-era economic crimes in order to get stolen capital back into the country).
Chris Doss The Russia Journal