Russia in the price trap: Vodka and food more expensive than ever!

Russia in the price trap: Vodka and food more expensive than ever!

The economic situation in Russia is worsening, which Vladimir Putin described as an “alarming signal”. Inflation is seen as a serious problem, while the Russian economy is showing signs of “some overheating”. Particularly striking is the increase in vodka prices, which have increased by 17% since January 1, 2025. The minimum price for half a liter of vodka was increased from 299 rubles to 349 rubles (approx. 2.66 euros to 3.10 euros).

The economic conditions are oppressive, as the average salary in Russia is around 800 euros. In addition, vodka sales between January and October 2024 reached a record level of 625 million liters, an increase of over 15% since 2017. Experts attribute the price increases to several factors, including high import prices, rising logistics costs and a weaker ruble. Inflation was around 7% in 2023 and is currently 9.5%. To counteract this, the central bank has raised key interest rates to a record 21%, which is putting additional pressure on the economic situation Statista reported.

Food price increases and other economic challenges

The price increases don't just affect vodka; Food prices are also rising significantly. Butter rose in price by 25%, potatoes by almost 95% and olive oil by around 31%. In addition, many Russians feel financially burdened during the Christmas season. Economists warn that the economy is overheating while the coal sector is in crisis. Car manufacturers, real estate construction and non-food retailers are also particularly affected, and are increasingly requesting government help.

The National Prosperity Fund has now reached its lowest level since 2008. Western sanctions make both the import and export of goods more difficult, forcing Russia to use methods such as a shadow fleet to sell oil, but incurring additional costs.