Since Ukraine Invasion, Cost Of Living In Russia Surges By Over 14%

According to recent data, 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 per cent in the last week. Inflation is expected to continue to rise in Russia, where the rouble has plummeted since the start of the Ukraine conflict.

This year, the value of the currency has fallen by nearly 22 per cent, increasing the cost of importing products. The inflation data was released as the Russian stock market began trading after a month-long holiday on Thursday, with the bulk of stocks advancing in a choppy session.

At lunchtime in Moscow, the benchmark Moex index was up roughly 5.6 percent.

Analysts said the market was being supported by a government plan to buy billions of dollars worth of Russian stock, which had plummeted when Russia invaded its neighbour last month.

Short-selling and foreign trade bans are still in effect.

Russia’s economic ministry announced on Wednesday that annual inflation increased by 14.5 per cent in the week ending March 18th, the highest rate since late 2015.

Sugar prices surged by as much as 37.1 per cent 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.

Onions saw the second-largest price increase this week, up 13.7 per cent nationwide and 40.4 percent in some places. Nappies, on the other hand, were 4.4 per  cent more expensive. Black tea prices jumped by 4 per cent, while toilet paper prices grew by 3 per cent.

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

“The biggest culprit is imported inflation,” Mr Innes told the BBC. “Anything Russia imports is exponentially (pricier) due to the weaker rouble.”

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 per cent in an attempt to save 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.

Russians have been advised that the country is “totally self-sufficient in sugar and buckwheat,” according to Deputy Prime Minister Viktoria Abramchenko.

“There is no need to panic buy these goods. There is enough for everybody,” she said.

Russian President Vladimir Putin has retaliated against foreign sanctions by threatening to take the assets of enterprises 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 would begin selling natural gas in roubles to “unfriendly” countries. The action is thought to be geared at bolstering the currency.

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

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

(Adpated from BBC.com)

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