Russian consumers feel squeeze

09 October 2014 - 02:09 By Bloomberg
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Russian president Vladimir Putin faces threat of more sanctions on his country
Russian president Vladimir Putin faces threat of more sanctions on his country
Image: RIA-NOVOSTI/ MIKHAIL KLIMENTYEV

There are many ways to measure the deepening financial crisis spreading across Russia.

The ruble is sinking more than any other currency in the world, foreign reserves have plunged to a four-year low and the economy is teetering towards recession.

Galina Mityaeva measures it in centimetres. The half stick of braunschweiger sausage that the 69-year-old retiree used to buy for her husband each week is now just too expensive.

Cut it a little shorter, she instructs the deli counter clerks at the supermarket she shops at outside Moscow - a quarter stick will have to suffice.

Seven months after President Vladimir Putin initiated his foray into Ukraine, triggering sanctions against Russia, consumers across Moscow are feeling the squeeze.

Annual inflation soared to a three-year high of 8% last month, led by a 17% surge in prices on meat and poultry, 28% on tobacco and 13% on international airfare and travel-related services.

The surge in food prices accelerated after Putin placed a ban in August on some imports from the US and Europe in retaliation for the economic sanctions against Russia.

The 17% annual rate of inflation on meat, for example, is up from 11% in July and follows a 3% decline in prices at the end of last year. Overall food inflation has almost doubled to 11% from about 6% last year.

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