Thirty-one percent of Russians say they can’t afford basic groceries anymore. That number, from real-time data tracked by SberIndex, is a flashing siren. Across Russia, the everyday cost of living is crushing people as the war drags into its fourth winter.
This is the direct blowback of Vlad Putin’s decision to launch a full invasion of Ukraine back in February 2022. While missiles hit energy plants and homes in border regions, inflation and shortages are slamming people everywhere else.
In central and southern Russia, drone attacks are now frequent. Air raid sirens go off almost every night. Meanwhile, residents of cities like Moscow are waking up to a very different battle; the economic kind.
Food prices are rising faster than wages. Gasoline shortages are back. Household spending is down. Stores are closing. And even Russia’s biggest industries are buckling.
Russians slash spending as inflation outpaces income
“Prices are now rising faster than wages,” said Elena, a 27-year-old events manager outside Moscow. She told Bloomberg she’s stopped buying imported clothes and is switching to local brands.
GDP once grew because of military-related investment. That same boost pushed up wages almost 20% in 2024. But now, inflation is eating away those gains.
To fight inflation, Russia’s central bank hiked rates to a record 21% last October. That slowed things down but didn’t fix the damage. Now that rates have eased, the country is facing the long-delayed fallout.
The Center for Macroeconomic Analysis said inflation is only down to 6.8% because people stopped spending. Real-time data shows food sales are falling across the board.
According to Kommersant newspaper, milk, pork, buckwheat, and rice sales dropped by 8% to 10% in September and October. And it’s not just groceries. X5 Group, Russia’s largest supermarket chain, said revenue is up, but only because of inflation. Its net income dropped 20%. People simply aren’t buying like they used to.
The retail collapse is spreading fast. Almost half of all fashion retailers shut down in Q3, according to local reports. Electronics sales just hit a 30-year low.
Car sales fell 23% in the first nine months of the year. That’s partly due to a state recycling tax hike and high interest rates, which slammed imported and electric vehicle prices.
Military strikes and falling oil revenue deepen economic cracks
Ukrainian drones have been reaching deep into Russian territory. Some hit as far as 2,000 miles into Siberia, targeting refineries and ports. Fuel markets cracked hard at the end of August. Prices jumped. Shortages followed. While gas prices dipped slightly in November, many areas are still running low.
The US is adding more pressure. In October, Washington slapped sanctions on Rosneft PJSC and Lukoil PJSC, two of Russia’s biggest oil producers. As a result, oil and gas income dropped 21% from January to October, hitting 7.5 trillion rubles, according to Finance Ministry data. That’s down from the year before.
Crude prices are lower. Sanctions are tighter. And a stronger ruble means producers get fewer rubles per barrel.
Russia’s economy shrank 0.6% in Q3. The budget deficit hit 1.9% of GDP in October. Officials expect it to hit 2.6% by year-end.
Meanwhile, the Center for Strategic Research said on Nov. 18 that more than half of Russia’s industries are shrinking, and a recession is now nearly certain.
Industries like steel and coal are collapsing. Steel use is down 14%. Demand in construction is down 10%, in machinery it’s down 32%. Coal mining is the worst it’s been in a decade. In the banking sector, bad corporate debt hit 9.1 trillion rubles ($112 billion) in Q2, 10.4% of the total. Retail loans are going bad too, now at 12%.
Even the trade relationship with China has cooled off. Fuel exports dropped to their lowest since the invasion began.
And the Trump administration is still working behind the scenes on a peace deal to give the Kremlin the sanctions relief it wants.
Despite all this, Putin won’t quit. Instead, he’s trying to keep the pressure from getting worse. In October, while Trump was threatening to send Tomahawk missiles to Ukraine, Putin reached out. He floated the idea of more talks, reportedly advised by Trump’s envoy, Steve Witkoff.
But no deal means more pain. A value-added tax hike is coming in 2026. Small businesses and consumers will pay more. There’s a new tech levy on electronics. Car taxes are rising. And according to Meduza, the Kremlin told media outlets not to mention Putin’s name in tax reports.
“If Russian authorities want the economy to keep functioning normally, special military operations must be wound down,” said Oleg Buklemishev, head of the Center for Economic Policy Research at Moscow State. “The realization they need to make the choice has not fully come, but the warning bells are already ringing.”
Don’t just read crypto news. Understand it. Subscribe to our newsletter. It’s free.
Source: https://www.cryptopolitan.com/31-of-russians-report-struggling-to-afford-basic-groceries-this-year/
