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Friday, March 31, 2023

Russia’s Cost of Living Spikes By 14% Amid Crippling Sanctions and Inflation

According to recent research, the cost of living in Russia is increasing as a result of the country’s invasion of Ukraine.

According to official data, the price of basic household commodities, such as sugar, has risen by as much as 14% in the last week.

Inflation is expected to continue to rise in Russia, where the rouble has depreciated since the start of the Ukraine invasion.

This year, the value of the currency has fallen by 22%.

Russia’s economic ministry announced on Wednesday that annual inflation has risen to 14.5 percent in the week ending March 18th, the highest level since late 2015.

Sugar prices surged by as much as 37.1 percent in some parts of the country, according to the Federal State Statistics Service, and by an average of 14 percent throughout.

According to the government agency, sugar, which is often used to preserve food or create liquor, was the greatest gainer in the week.

Onion prices rose the second most this week, up 13.7 percent nationally and 40.4 percent in certain places. Meanwhile, the cost of diapers increased by 4.4 percent. Black tea prices jumped by 4%, while toilet paper prices grew by 3%.

Prices were higher due of the weakening rouble, according to Stephen Innes, managing partner at SPI Asset Management.

“Imported inflation is the major issue,” Mr Innes told reporters. “Due to the weakened rouble, everything Russia buys is enormously more expensive.”

A number of Russian banks have been cut off from Western financial markets by the United Kingdom, the United States, and the European Union.

Dealings with Russia’s central bank, state-owned investment funds, and the finance ministry are likewise illegal.

In March, the Bank of Russia more than quadrupled its interest rate to 20% in an effort to keep the ruble from falling further.

Because of the conflict in Ukraine, a substantial number of Western companies have pulled out of Russia. Others, such as Nestle, the Swiss food behemoth, have pulled big brands like KitKat and Nesquik.

Social media videos show customers in Moscow scurrying to acquire sugar and buckwheat at stores.

Viktoria Abramchenko, the country’s deputy prime minister, assured residents that the country is “totally self-sufficient in sugar and buckwheat.”

“There’s no hurry to rush out and acquire these items. There is plenty to go around for everyone “she stated

Russia has retaliated against international sanctions by threatening to confiscate assets of companies that have ceased operations in the country.

Last Monday, it sanctioned US Vice President Joe Biden and 12 other US officials.

Russian President Vladimir Putin stated on Wednesday that the government will begin selling natural gas in roubles to “unfriendly” countries. The action is said to be geared at bolstering the currency.

For 40% of its gas, the EU is reliant on Russia. However, many current contracts are in euros, and it is uncertain if Russia will be able to renegotiate them.

The rouble hit a three-week high after Mr Putin’s remarks. It eventually settled at 97.7 cents to the dollar.

Cedric Blackwater
Cedric Blackwater
Cedric is a journalist with over a decade of experience reporting on local US news, and touching on many global topics. He is currently the lead writer for Bulletin News.

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