While Russia maintains its military standoff in Ukraine, another battle is being fought on its own territory: that against galloping inflation. Behind the official figures lies a much darker economic reality, hitting the daily lives of Russians hard.
When the price of butter becomes a symbol in Russia
Butter, an essential product on the Russian table, has become a striking illustration of inflation. In one year, its price has almost doubled. This surge in prices does not stop at butter: fruits, breads, dairy products, everything is increasing. The cause is Western international economic sanctions against Russia and the weakness of the ruble. Importing essential ingredients is now much more expensive, which has a major impact on everyday consumer products.
To curb inflation, the Russian Central Bank has taken drastic measures. In October 2024, it raised its key rate from 19% to 21%, a record since 2003. This decision aims to stabilize prices, but it weighs on businesses and households. With mortgage rates around 25%, becoming a homeowner in Russia is now a miracle. The president of the central bank, Elvira Nabioullina, however, defends a policy focused on stability: “ Without it, sustainable economic growth is impossible. »
Increasing social pressure to come?
Inflation first hits the most vulnerable populations, those whose incomes are stagnating. The Kremlin knows: ignoring this problem could reignite social tensions. Putin, in a speech marked with Soviet nostalgia, insists on the need to find a balance between “butter and guns”. But this balance seems more and more precarious. Households are worried and struggling to make ends meet.
This situation places the Kremlin facing a strategic dilemma. International sanctions, combined with the war in Ukraine, weigh heavily on the Russian economy. Galloping inflation becomes a major political issue: how to maintain stability without compromising the war effort? Russia, stuck in this double battle, is struggling to find viable solutions in the short term.
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