Russian bread prices are far outstripping inflation, as the economic crisis in the country intensifies. The Kremlin has been battling persistently high inflation, which stubbornly persists to hover above 9%.
The Russian Central Bank has been forced to hike interest rates to 20% in a bid to bring inflation down. However, food prices are continuing to soar well above the official inflation rate, leaving hard-pressed consumers seriously out of pocket. Latest figures show bread prices in Russia rose 15-17% in annual terms, while inflation for the year reached 9.45%.
Overall, bread prices have surged by more than 35% since the full-scale invasion of Ukraine in February 2022. Bread production costs also rose by an average of 27% in 2024, Dmitry Semenov, president of the Russian Bakers Union, previously said.
“Current lending rates make loans unaffordable; high profitability is needed to service such debts, but bakeries operate on slim margins,” he said, referring to the Central Bank’s 20% key rate. Semenov also cited workplace shortages, which reach up to 40% of the staffing levels at individual enterprises.
Kremlin officials will no doubt be well aware of the potential social and political consequences of rising bread prices.
The Russian Revolution of 1917 was sparked by a hike in the price of bread, which fuelled public anger and discontent with the Tsarist regime.
The price of cherries has also exploded over the last month, rising by a whopping 38% compared to last year. The explosion in grocery costs has increased calls for the Kremlin to freeze the prices of basic food products.
It comes as more and more Russians are reported to be falling into debt, as they try to pay their utility bills. From the beginning of July, utility tariffs increased on average by 12%. Sociologists and financial analysts have noted growing public anger at the rise in utility bills.
According to a poll by the Public Opinion Foundation in the first week of July the number of Russians complaining at a marked increase in their communal and utility bills rose by one third.