Russian and Ukrainian officials met in Geneva, Switzerland, on Tuesday (local time) as the Russia-Ukraine war approaches its fourth anniversary, AP reported, adding that expectations for any breakthrough are relatively low.
However, it looks like accepting a truce will benefit both Moscow and Kyiv as Russians are now starting to feel a pinch in their pockets, the BBC reported.
With Russia’s economy hanging in the balance between stagnation and decline, several Russian citizens have seen their monthly food budgets soar. From eggs to chicken fillets to seasonal vegetables, the cost of almost all the essentials has gone up in the local supermarkets.
The BBC interviewed Russians, one of whom said that his monthly food budget has risen by more than 22%, from 35,000 roubles ($450) to 43,000 roubles ($555). Even his daily treat, an Americano from a local cafe, has seen a 26% surge, from 230 roubles to 290 roubles.
The report suggests that prices have risen significantly since the beginning of the war in Ukraine, driven by a federal budget dominated by the war effort and the defence industry, which has led to rapid economic growth and raised the standard of living across the country.
Inflation levels remain unnoticed until 2025
In big cities like Moscow and St Petersburg, the high inflation levels have largely remained unnoticed by the general public. This is because robust government spending has helped cover the mounting economic costs of the war, along with the impact of Western sanctions and the exodus of foreign investment from Russia.
However, in 2025, this rapid economic growth took a sharp turn, and when citizens’ salaries could no longer bear the brunt of inflation, rising prices began to hit people’s pockets.
Factors causing price hike
In January 2026, supermarket prices jumped, rising 2.3% in less than a month, the BBC reported, citing data from Russia’s statistics service Rosstat. Almost all essential products became expensive at the beginning of the year, including milk, meat, salt, flour, potatoes, pasta, bananas, soap, toothpaste, socks, laundry detergent, and medicines.
It is worth noting that Moscow relies on imported fruit and vegetables, so store prices are very sensitive to fluctuations in the rouble’s exchange rate and to disruptions in the supply chain, both of which occurred after the war began in Ukraine.
The price of dairy products has also risen sharply. Despite being locally produced, these soared nearly 41%, marking the biggest rise in the last two years. The rise in dairy products is attributed to the hit the dairy industry took due to rising farm costs, expensive loans, and labour shortages.
Another crucial factor in the price hike is a two-point increase in Value Added Tax (VAT), which rose to 22% from 20% on 1 January. The hike in sales tax is being directly attributed to Moscow’s war in Ukraine, the BBC reported after the country’s finance ministry said that it was needed to finance the country’s “defence and security.”
While many in Russia are unwilling to compromise on their spending and eating habits, some are now looking for cheaper alternatives. Some others are now prioritising food over other expenses, which have been put on hold.
Russian economy at risk of going into the red?
Citing economists, the BBC report suggests that the Russian economy’s recent slowdown indicates it is at risk of going into the red, and one of the main risks is likely to come from the oil market. While Moscow’s federal budget is based on a higher oil price, the global market rates have fallen sharply, with no expectation of a rise this year.
To make matters worse, Moscow’s crude oil exports have also been hit by the latest sanctions levied by the United States, which are cutting supplies to Russia’s key trading partner, India.
Further, borrowing is increasingly difficult owing to high interest rates, and only a handful are willing to lend to a country at war.
