Russia is raising the cost of sweets in the country by 50% as the economy continues to flatline, according to a Ukrainian economist. Kyrylo Shevchenko says that the price increase is not due to the ongoing war in Ukraine or western sanctions but is actually part of a wider move to combat “fake sweets”.
He blamed the increase on “the real recipe: one part bureaucracy, two parts dysfunction. All while industrial growth flatlines and the focus shifts to a growing war economy.” Express.co.uk was unable to independently verify the increase but if true, it would be in line with a host of other products that have increased since Putin’s invasion of Ukraine. Over the last year in Russia, the cost of milk and apples have gone up by approximately 20%, cucumbers by 22%, beetroot by 32%, butter by 35%, cabbages by 42%, onions by 46% and potatoes by a whopping 90%.
Oil, a product that has helped keep the Russian economy afloat amid crunching sanctions also looks to be on a downward trajectory.
In 2024, Lukoil reported a stunning 26.5% drop in net profits, blaming impairment losses and deferred taxes.
The company posted a net profit of 848.5 billion rubles ($10.1 billion) last year, down from 1.1 trillion rubles ($13.7 billion) in 2023.
A statement said: “The group recognised an impairment loss of 93.3 billion rubles in fixed assets – 50.4 billion rubles related to exploration and production assets and 31.1 billion rubles in processing, trade and sales assets abroad.”
The Russian economy continues to feel the impact of the war in Ukraine, despite the prospect of a ceasefire.
In March, the Central Bank maintained record-high interest rates of 21% despite Vladimir Putin urging governor Elvira Nabiullina not to “cryogenically freeze” the economy by doing so.
The prospect of a drawback in the Ukrainian conflict poses risks of its own for the country.
Since the 2022 invasion, many large Russian firms have adapted their output to meet the needs of Putin’s war effort, meaning peace could leave them without orders.
Alexandra Prokopenko, a former Russian central bank official, said: “Putin will need to replenish arsenals which means military expenditures will remain elevated for a couple of years after the war.
“A peace deal will be another shock for the economy, but a manageable shock.”
The country currently spends 6% of GDP on defence, rivalling Soviet-era levels with over $160 billion spent annually.
The fear of the Kremlin is that despite the economic squeeze caused by the war, peace could result in a shutdown or a recession in the near term.