Russians face rising costs and tough choices this new year

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Walking through an icy market in Moscow earlier this month, Sergei Borisovich, 60, recalled that he had struck the last New Year at a table laden with festive delicacies.

This year, the factory worker, who declined to give his last name, said a spike in prices meant he would have to forgo caviar and other treats so he could afford a bottle of champagne for the countdown to the biggest party in Russia.

People are making sacrifices across the country, soaring inflation pushing up costs and forcing cash-strapped Russians to make tough decisions while on vacation.

“Everything is getting more expensive but wages are not increasing,” said Sergei Borisovich, shocked that a loaf of bread now costs 100 rubles ($ 1.35).

President Vladimir Putin has described prices as a major concern and the besieged opposition hopes to capitalize on the economic difficulties.

This month, inflation hit its highest level since 2016, with rising daily costs hitting hard on a population with an average monthly income of 40,402 rubles ($ 545).

In addition, 43% of Russians have no savings, according to a recent survey by recruiting site SuperJob.

Sergei Borisovich said that this year’s table will be garnished only with a salad of potatoes and peas.

“I’ll buy Shampanskoye if I can,” he said, referring to the sparkling wine popular during the Soviet Union.

Red caviar, served with bread and butter on New Year’s Eve, has been the most expensive since surveillance began in 2000.

Ingredients for other holiday dishes like the mayonnaise-rich “Olivier” salad are expected to cost 15% more than last year, Russian media reported citing statistics agency Rosstat.

“Harring Under a Fur Coat” – a layered dish of pickled herring and beetroot – will set Russians back 25% more than last year.

“Inflationary tragedy”

The standard of living in Russia has gradually declined since Moscow was hit by a series of Western sanctions in 2014 for its annexation of Crimea to Ukraine.

Now, the decline is accelerating, affecting even those of Moscow, the richest city.

Karina Strukova, an engineer on maternity leave, says this trend has forced her to stop buying groceries from upscale grocery chain Vkusvill in favor of lower-cost Magnit stores.

The 30-year-old told AFP that her grocery bill had increased by 25% since last year.

“We are trying to reduce our expenses a bit because we have no other source of income,” she said.

“We buy fewer gifts and go to cheaper stores.”

Kremlin critic Alexei Navalny, controversially jailed earlier this year for fraud, said he even felt the pinch behind bars.

He wrote on Instagram that food prices have risen by at least 40% in less than a year at a store where he’s allowed to spend 9,000 rubles ($ 120) a month to supplement his meals.

“The great inflationary tragedy that retirees are going through is unfolding before my eyes,” he wrote.

Polls have shown declining purchasing power to be a major concern for Russians, affecting confidence in authorities and Putin’s approval ratings.

To curb soaring prices, the government introduced price caps and export quotas, while the central bank repeatedly raised its key rate.

The Russian leader described inflation as “the main problem today for the economy and citizens” and asked the authorities to reduce it from more than 8% to 4% in the coming year.

But many of the causes of inflation are global, resulting from spending on post-pandemic recovery and supply chain disruptions, said Igor Nikolaev of the FBK Grant Thornton Russia Institute for Strategic Analysis.

The situation is worsened in Russia, he said, where there are not enough players in the market to bring prices down.

“When there is not enough competition, there is no mechanism preventing producers and sellers from raising prices,” Nikolaev added.

At the market to buy gifts for her grandchildren, 88-year-old retiree Svetlana Knyazeva says people can get used to anything.

“I can’t say I have a bad life,” she says, adding that she has a pension of almost 30,000 rubles ($ 400) a month.


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