Russian shoppers are experiencing difficulties due to the continued presence of high inflation rates

Moscow’s supermarket shelves are well-stocked with fruits, vegetables, cheeses, and meats. However, many shoppers are dismayed as ongoing inflation diminishes their purchasing power.

The Central Bank of Russia has increased its key lending rate four times this year in an effort to rein in inflation and stabilize the ruble amidst the economic impact of Russia’s military actions in Ukraine and resulting Western sanctions.

The most recent rate hike brought it to 15%, double the rate at the start of the year, in response to annualized inflation rates around 12%. The bank now expects inflation to hover around 7.5% for this and the next year.

However, this rate might be an understatement. Roxana Gheltkova, a Moscow shopper, noticed price increases of about 25% in meats, dairy products, fruits, vegetables, and sausages, her husband’s favorite. Lilya Tsarkova, a pensioner, expressed that her income is insufficient to cover her expenses without her children’s help, especially for rent and food.

Data from Rosstat, released on Nov. 1, shows significant price increases from 2022 for certain foods: cabbage by 74%, oranges by 72%, and cucumbers by 47%.

The Russian parliament’s budget for 2024-2026 includes record defense spending, which Maxim Blant, a Russian economy analyst based in Latvia, views as a sign that prices will continue to soar. He argues that tackling inflation is challenging in a context where the military-industrial complex receives substantial funding and its economic share grows rapidly.

The central bank’s rate increases have somewhat stemmed the ruble’s depreciation, with its value currently at about 88 to the U.S. dollar, improved from over 100 earlier. However, this rate remains significantly weaker than the summer of 2022’s rate of around 60 to the dollar, keeping import costs high, further exacerbated by Western sanctions.