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March 28, 2022 - Russia is on track for one of the deepest recessions in its modern history. After the rouble crashed in the wake of President Vladimir Putin’s invasion of Ukraine, Russians now face food shortages and soaring prices.
Official figures show average prices of some household staples, such as sugar, have jumped by almost 14 per cent in the week ending March 18. The cost of sugar rose by as much as 37.1 per cent in some areas of the country.
Inflation has jumped to 14.5 per cent, and the rouble has fallen 18 per cent since the Ukraine war began. The country imports 12 per cent of its food and six per cent of its pharmaceuticals.
The inflation data from Rosstat -- the federal state statistics service -- came as the Russian stock market resumed trading on Thursday after a month-long shutdown.
Older citizens remember the hyperinflation of the early 1990s following the collapse of the Soviet Union. However, in Putin’s Russia, high-quality food staples became more widely available and affordable.
Prices began to rise following the annexation of Crimea and during the pandemic due to supply chain disruptions.
In a July 2021 survey, 60.4 per cent of respondents said they spend about half of their monthly income on food. The study of 5,000 people, ages 20-55, by Synergy University also found 16 per cent spend almost all their earnings on food.
The Putin government has created a stability fund to shore up the rouble. A Food Security Agenda boosts Russia’s self-sufficiency in grains, meat, dairy and other staples.
On Wednesday (March 23, 2022), President Putin announced that Russia would start selling natural gas to “unfriendly” countries in roubles -- a move to support the currency.
- Panicked Russians Don’t Believe Official Advice That Economy Is Fine (Bloomberg)
- On the assessment of the consumer price index from 12 to 18 March 2022 (Rosstat)
- Over 60% of Russians spend half of their salary on food — research (Tass)
- U.S. Dollar to Russian Rouble exchange rate history (Exchange Rates)