Soaring Food Prices Dampen Festive Cheer in Russia

Soaring food prices are casting a shadow over holiday celebrations in Russia, forcing many to tighten their belts, reports Reuters. Despite rising wages in some sectors, stubborn inflation has driven up the cost of staples like butter, potatoes, and chicken, significantly eroding purchasing power for many Russians.

Reuters spoke with residents across the country, from Moscow and St. Petersburg to Yekaterinburg and Omsk, to gauge the impact of rising costs on their holiday spending.

"Prices have noticeably increased," said Natalia Moreva, 58, a government employee in Omsk, listing flour, bread, chocolate, fruit, vegetables, and meat as items that have become significantly more expensive.

"Incomes are sufficient, but when you go to the shop you used to be able to buy more," Moreva noted. "The holiday is turning out to be a modest one."

This year, the traditional pre-New Year spending spree is facing a new challenge: inflation exceeding 9%, despite the central bank maintaining interest rates at a 21-year high of 21%.

"Way more expensive, it is heavy on the pocket. In past New Years, expenses more or less met the budget. Now, the costs are much higher, maybe three or four times more than before," said Dinara, a student from Yekaterinburg, to Reuters.

While real wages have risen in some sectors, notably defense and technology, for many, the wage increases are insufficient to offset the impact of inflation. This disparity is particularly noticeable for pensioners.

"It is, of course, not very nice or convenient for people at the moment," said Vyacheslav, 73, a pensioner in Omsk, to Reuters. "We understand that the country is in a difficult situation at the moment, but nevertheless I would like for grocery prices not to grow so quickly."

Vyacheslav noted that the price of his favorite cheese has risen by 15% to 20% since September, reaching around 850 roubles.

Despite the central bank's efforts to curb inflation, the impact of high borrowing costs is rippling through the Russian economy. Mortgage rates approaching 30% are dampening demand in the real estate market, while simultaneously fueling a boom in the rental sector.

"Communal services are getting more expensive, (so are) taxes, and it is very noticeable," said Veronica Arefieva, a Moscow student. "When you go to the shop, a loaf of bread that once cost 20 roubles, now costs 50 roubles."

The rising cost of basic goods and services is putting a strain on holiday celebrations, forcing many Russians to adjust their spending habits and prioritize essential items over discretionary items.