Young Russians are bemoaning the state of their country’s economy as prices for everyday goods soar following Western sanctions. The Russian economy is buckling under pressure as GDP falls by 10 percent so far in 2022, with a further 1.5percent reduction expected next year according to the European development bank EBRD. This would mark the biggest economic downturn since the aftermath of the Soviet Union’s collapse three decades ago.
Many huge brands have pulled out of Russia following its invasion of Ukraine, and the impact on living standards is starting to show.
Economists from the Centre for Economics and Business Research (CEBR) have given a severe warning about the damage being dealt to Russia’s economy.
They argue that the combination of sanctions, higher import costs, and soaring commodity and food prices mean Putin’s war will deal a “severe” blow to living standards that will be “hard to offset” for the Kremlin.
Wages are also feeling the burn, and are expected to plummet by a quarter in real terms over the next two years.
A Russian 21-year-old speaking to the Telegraph, given the name Katya to protect her identity, said that a cup of coffee in Moscow is now an unrealistic luxury, costing “as much as a whole meal in a mid-range cafe”.
She added that shop spaces are “half empty”, and that “Chocolate and Coca-Cola are still currently on sale, but soon they may not be either.”
“Uniqlo, H&M, Zara, Pull&Bear, Sephora, Jo Malone, Starbucks, Mcdonalds, Nespresso, Ikea are closed, as are many brands like Dolce & Gabanna and Gucci.”
Russia’s technology industry has been hit heavily by sanctions due to the reliance on Western-based companies.
Apple, for instance, have stopped trading in Russia altogether.
This lack of supply places an upward pressure on prices for goods.
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Some Russian people report being unable to purchase tampons, with long queues in pharmacies.
Last week, the Russian Council of Shopping Centres said it had reached out to counterparts in India, Turkey, Iran and China with a list of the replacement products they needed to keep the country’s economy afloat.
The job industry is similarly struggling. Research from Yale suggests that 500 companies have now withdrawn from Russia.
Meanwhile, economists polled by Bloomberg fear the unemployment rate will increase from just above 4percent at the end of 2021, to more than 7percent in 2023.