Russian and Ukrainian officials met in Geneva, Switzerland on Tuesday (local time) as the Russian-Ukrainian war nears its fourth anniversary, the AP reported, adding that expectations of any breakthrough were relatively low.
However, the acceptance of the ceasefire seems to benefit both Moscow and Kiev, as the Russians are now starting to feel the pinch in their pockets, the BBC reported.
As the Russian economy hangs on the balance between stagnation and decline, several Russian citizens have seen their monthly food budgets increase. From eggs to chicken cutlets to seasonal vegetables, almost all necessities have become more expensive in local supermarkets.
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The BBC interviewed Russians, one of whom said his monthly food budget had risen by more than 22%, from 35,000 rubles ($450) to 43,000 rubles ($555). Even his daily treat, the American from the local cafe, saw a 26% increase, from 230 rubles to 290 rubles.
The report suggests that prices have risen significantly since the start of the war in Ukraine, driven by a federal budget dominated by the war effort and the defense industry, which has led to rapid economic growth and increased living standards across the country.
The level of inflation will remain unnoticed until 2025
In major cities such as Moscow and St. Petersburg, high levels of inflation went largely unnoticed by the general public. That’s because massive government spending has helped cover the growing economic costs of the war, along with the impact of Western sanctions and an exodus of foreign investment from Russia.
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However, in 2025, this rapid economic growth took a sharp turn, and when citizens’ salaries could no longer withstand the onslaught of inflation, rising prices began to hit people’s pockets.
Factors causing price growth
In January 2026, supermarket prices jumped, rising by 2.3% in less than a month, the BBC reported, citing data from the Russian statistics service Rosstat. At the beginning of the year, the prices of almost all basic products increased, including milk, meat, salt, flour, potatoes, pasta, bananas, soap, toothpaste, socks, detergents and medicines.
It’s worth noting that Moscow relies on imported fruit and vegetables, so store prices are very sensitive to fluctuations in the ruble exchange rate and supply chain disruptions, both of which occurred after the start of the war in Ukraine.
The price of dairy products also rose sharply. Despite being produced locally, they soared by nearly 41%, the biggest increase in two years. The increase in dairy products is attributed to the hit the dairy industry has taken due to rising farm costs, expensive loans and labor shortages.
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Another major factor in the price increase is the two-point increase in value added tax (VAT), which rose to 22% from 20% on January 1. The sales tax hike is directly attributed to Moscow’s war in Ukraine, the BBC reported, after the country’s finance ministry said it was needed to fund “the country’s defense and security”.
While many in Russia are unwilling to compromise their spending and eating habits, some are now looking for cheaper alternatives. Some others are now prioritizing food over other expenses that have been put off.
Is the Russian economy in danger of falling into the red?
Citing economists, the BBC report suggests that the recent slowdown in the Russian economy suggests it is at risk of slipping 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, global market rates have fallen sharply and are not expected to rise this year.
To make matters worse, Moscow’s oil exports have also been hit by the latest sanctions imposed by the United States, which limit supplies to Russia’s key trading partner, India.
In addition, borrowing is increasingly difficult due to high interest rates, and only a handful are willing to lend to a country at war.