Russians are starting to feel the economic crisis after Western countries imposed an unprecedented series of sanctions on Moscow’s invasion of Ukraine.
After weeks of mounting tensions, Russian President Vladimir Putin ordered a land, sea and air invasion on February 24, sparking a wave of financial restrictions that plunged the value of the ruble, inflation skyrocketed and left. many out of work.
In a speech to government ministers broadcast on Wednesday, Putin insisted that Russia could resist the “economic blitzkrieg”.
Below is a look at how sanctions are biting Russian everyday life:
The official statistics agency Rosstat said on Wednesday that inflation was 2.1% between March 5 and 11, the second highest weekly figure in more than 20 years. According to the Ministry of Economy, annual inflation jumped to 12.5% on March 11 from 10.4% the previous week.
Business newspaper Kommersant reported a 10.4% increase in food prices from February 26 to March 4, the highest increase since 1998.
A social media user from the southwestern city of Samara, who identified himself as Ivan, She said a tin of tuna now costs between 160-180 rubles, from what was 130 rubles. He also claimed in a Twitter post that sugar is not found in many stores.
The Russian currency has lost around 20% of its value in the past three weeks, prompting many retailers to raise prices.
One of them is Procter & Gamble, which has increased its prices by an average of 40 percent, Kommersant said, due to higher costs of logistics, materials and the falling ruble. Feminine hygiene products now cost up to 30% more.
To counter the rise in costs, retailers have committed to a 5% markup on commodities, including dairy products and some vegetables, the TASS news agency reported.
shortage of medicines
Sasha, a woman living in St. Petersburg, who asked to remain anonymous, described an “endless line” in front of pharmacies with the prices of medicines rising. Two of her friends with hers, she said, were considering going to Finland to take the necessary medications.
Although drug sales are not subject to sanctions, prices are expected to rise, albeit not as much as other goods, after major shipping companies shut down their services to Russia. Local media reported that drug prices in the Saratov region increased by 2.3-6.7%.
Andrey Baratov, head of the regional department of Roszdravnadzor, the federal health surveillance service, said he did not expect a “fatal” rise in drug prices, although he said the authorities listened to citizens’ complaints about the lack of vital drugs in pharmacies and doubts about the suitability of Russian medicine to replace foreign drugs.
Increase in unemployment
After some hesitation, Western nations decided to remove some Russian banks from the SWIFT international payment system, which means that companies like Visa, Mastercard and others would severely restrict their services.
Such a move, along with other sanctions, could cause the Russian economy to contract by 10 percent, according to Elina Ribakova, an economist at the Institute of International Finance.
Although official numbers are not yet available, the closure or departure of a large number of multinational companies such as Apple and IKEA is expected to have a significant effect on employment data. US fast food franchise McDonald’s complained of the fallout from around 62,000 people employed in 850 restaurants in Russia before ceasing operations on March 8.
An analyst quoted by Kommersant estimated an “inevitable” drop in wages and an increase in unemployment of about seven percent by the end of 2022.
Sergei Grishunin, chief executive of the National Rating Agency, told local news site Gazeta.ru that he expects “explosive growth” in the number of bankruptcy cases in 2022, more than double the previous year.
Holidays for Russians next summer will not be the same as tour operators expect a 30% increase in prices within the country, according to local media.