Inflation is the last channel's output in the financing chain this monitor tracks: pressure that can become visible in the prices households pay. It is the last link in that chain, not the first.
Why a rate, not a level
Most of this monitor's indicators are read as a level against a fixed pre-war point, because the underlying stock or flow can, in principle, recover to where it stood before the war. Prices cannot do that: they do not return to a pre-war baseline on this scale. What can return to a pre-war baseline is the pace at which prices are rising — so inflation is scored as a year-on-year rate, read directly from the national statistics agency's monthly consumer price index, rather than as a level.
Where the anchors come from
100 marks 4.6% a year, the measured 2017–2021 average before the war. 0 marks 40% a year, the inflation-crisis threshold in the growth literature (Bruno–Easterly, 1998). Both were registered in advance; the reasoning is set out on the methodology page.
Why it sits at the end of the chain
Oil and gas revenue and borrowing are the ordinary ways to cover a widening deficit. When those run short, the liquid National Wealth Fund absorbs the gap. When state banks expand credit to keep covering it, the pressure can show up in the money supply and in the prices households pay. Watching all four together provides context that an isolated inflation reading cannot.
What a faster reading does not mean
A rising inflation rate on its own does not identify which policy caused it, and the monitor does not claim to isolate a cause from one series. It is a confirming indicator: read alongside the other seven readings on the monitor, not as proof that pressure elsewhere in the chain caused a particular change in prices.