Russia has been plunged even further into economic meltdown as some retailers are even forced to lock up their butter due to soaring costs.
The country is struggling in the face of strict sanctions from the West, labour shortages, the cost of the Ukraine war, and corruption.
As a result, Vladimir Putin appears to be struggling to sustain his war economy, but has still allocated a third of its budget for 2025-2027 to defence.
United States Secretary of Defence Lloyd Austin revealed that Russia has spent over £156 billion on funding the war in Ukraine, which has resulted in at least 700,000 casualties – as many as 1,000 a day recently.
The liquid assets in Russia’s National Welfare Fund have also dropped from £110 billion to £43 billion between February 2022 and December 2024, according to the Ukrainian Center for Countering Disinformation.
This has caused the Russian ruble to plummet, crashing in late November to the lowest it’s been since March 2022 – a month after the unlawful invasion of Ukraine began. Since August of this year, the currency has also lost a third of its value.
The weakening currency has sent the price of basic goods skyrocketing, forcing some shop owners to lock up their dairy products to stop them from being stolen.
Pensioners, who claim the equivalent of just £146 a month, have been hit particularly hard by the declining economy.
A 72-year-old retired history teacher living in St Petersburg expressed her fury at the situation that is affecting average citizens.
She told Radio Free Europe/Radio Liberty’s Russian service: “I see these prices, my eyes get wide. What’s going on? Prices are rising for absolutely everything. Polite words fail me, of course. I have to joke about it to cool down my anger.”
Inflation in Russia is currently around 8 percent, and the Central Bank is expected to once again hike interest rates, increasing mortgages and business loans.
Sergei Aleksashenko, a former Central Bank official, said there has been an influx of rubles ahead of December 20, when new US sanctions come into effect, as everyone rushes to make transactions.
He told the outlet: “It seems to me that the sharp jump in the ruble (or dollar) is explained by the fact that the rules of the game will be changed, and no one knows what the new rules will be.”
