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Russians Face Financial Strain This Holiday Season
YEKATERINBURG, Russia (Reuters) – As the festive season approaches, many individuals in Russia are feeling the pinch of inflation, which has steadily increased the prices of essential goods like butter, potatoes, and chicken. This financial strain is particularly affecting the nation’s lower-income households, prompting them to reevaluate their holiday spending plans.
To gauge the impact of rising prices, Reuters spoke with individuals across major cities, including Moscow, St. Petersburg, Yekaterinburg, and Omsk.
“We’ve seen a significant increase in prices,” remarked Natalia Moreva, 58, an employee of the Omsk regional government. She highlighted staples such as flour, bread, chocolates, fruits, vegetables, and meat, all of which have witnessed substantial price hikes. “While our incomes are adequate, the shopping experience is vastly different now than it used to be,” she added. “This holiday is proving to be quite modest.”
Traditionally, Russians ramp up their spending in late December to prepare for the New Year festivities and the holidays that follow in early January. However, the financial burdens this year have escalated unexpectedly.
“Everything is significantly more expensive; it’s hard on our finances,” explained Dinara, a student from Yekaterinburg, the country’s fourth-largest city. “In past years, our New Year expenses would generally align with our budget, but now we’re spending three to four times more.”
Rising Prices
While real wages in Russia have seen some increases, particularly in the defense and tech sectors, the general workforce has found its earnings unable to keep pace with the current inflation rate, which exceeds 9%. This situation persists despite the central bank maintaining high interest rates at 21%, the highest in over two decades.
Vyacheslav, a 73-year-old pensioner in Omsk, shared his observations of daily price increases. “It’s certainly inconvenient for people at this time. We understand the country’s challenges, but I wish grocery prices wouldn’t rise so quickly,” he said, noting that his favorite cheese has seen a 15% to 20% price increase since September, reaching around 850 roubles.
According to Andrei Gangan, director of the central bank’s monetary policy department, inflation could finish the year at around 9.8% and is projected to peak in April 2025 before beginning to decline.
Despite maintaining interest rates, the central bank’s decision has influenced Russia’s real estate market. High borrowing costs are cooling demand, leading to mortgage rates soaring as high as 30%, which is deterring potential buyers and causing a surge in rental prices.
Veronica Arefieva, a student in Moscow, mentioned the noticeable rise in communal services and taxes, stating, “When I go shopping, I see that a loaf of bread that once cost 20 roubles now costs 50 roubles.”
Similarly, fellow student Sergei Shoreshorin expressed concern about the rising costs of chocolates, calling the prices “scary.”
The increase in prices is not limited to food; even seasonal purchases like Christmas trees have seen significant jumps in cost. Ramiz, a vendor in St. Petersburg, observed varied customer responses: “Some people don’t even inquire about the price when they want a tree; they simply buy it. Others, even when offered a discount, decline because they can’t afford it.” He continued with good wishes for the season, hoping that the coming year would bring financial relief to all.
Source
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