WASHINGTON (TNND) — This month marked 1,000 days of Russia’s war in Ukraine. The invasion not only hurt Ukraine but dealt a blow to the Russian people, now facing a grim economic reality.
When Russian President Vladimir Putin waged war on Ukraine, he also sparked an economic battle for his people.
In February 2022, the U.S. And its allies quickly hit Russia with sweeping economic sanctions and have kept them coming ever since.
“We’ve cut off Russia’s government from Western financing,” President Joe Biden said at the time.
To compensate, Moscow has turned to China and India. Spikes in oil prices over the past two years have also kept Russia’s economy afloat, even expanding–a source of frustration for Washington.
Here’s what Daleep Singh, a leader of the U.S. Sanction strategy, recently told 60 Minutes about their impact on Russia’s economy.
“Let’s be honest, this is not the nosedive that I predicted two years ago,” Singh, the deputy national security advisor for international economics said. “On the surface, Russia’s economy may appear to be a fortress but underneath, the foundations are fragile.”
Fractured supply chains and massive military spending have ushered in high inflation. Right now, Russian prices are rising at a rate of 8.5% a year. For fruits and vegetables, it’s 13.5%. “Firstly, inflation. Overall, we can see no signs of its slowdown,” Governor of the Central Bank of Russia Elvira Nabiullina said.
To try to get prices under control, last month, Russia’s Central Bank raised its interest rate to 21% and plans to go even higher next year.
The news is devastating to prospective homebuyers. One realtor from Russia who did not want to be named for security reasons told the Russian-language outlet Current Time, “The market is dead.”
Making all of this worse is the decline of the ruble, Russia’s currency. This means Russians have less buying power so high prices hurt even more. Right now, one ruble is roughly equivalent to one penny.
Another economic headwind is a serious labor shortage as working-age men are conscripted to the battlefield, with many of them unexpected to return.
For many Russians, times are especially tight. But the real price of this war is paid in lives, inside Ukraine.
