Fish. Chicken. Pasta. Meat. It's all a lot more expensive in the central Russian city of Ufa, and Vera, a 63-year-old retiree, is unhappy.
"Nothing has gotten cheaper. Everything is getting more expensive, a little bit every day," she told RFE/RL's Tatar-Bashkir Service, adding that she supplements her 25,000-ruble ($323) monthly pension with a part-time job to get by. Cucumbers "cost 300, 400 rubles a kilo now. They used to be much cheaper," she added.
Vera's not wrong. According to the state statistics agency Rosstat, prices rose 2.1 percent in the first two months of 2026.
On the verge of its fifth year of all-out war on neighboring Ukraine, the Kremlin is fighting another stubborn enemy at home: high consumer prices and climbing unhappiness among average Russians.
The war years have been fat for many Russians. Despite being battered by Western sanctions imposed in punishment for its invasion of Ukraine, the economy has held up far better than many experts, in and out of Russia, had predicted.
The government opened up spigots of spending for the military and the military-industrial complex to feed and fuel the war. Extraordinarily high wages and benefits for volunteers signing up to fight transformed many Russian regions, particularly poorer ones, and widows and survivors also benefited from the state largesse.
It worked -- at least until the flood of money started warping the economy, pushing up wages for civilian sector jobs: Think factory workers assembling artillery shells or sewing tactical vests. That in turn pushed up inflation, which soared to nearly 10 percent in 2024.
The Russian central bank hiked interest rates to tame inflation and bring the economy back to Earth. The question is whether it will be a hard or soft landing.
"Overall, the economy is stagnating, even stagflation," Dmitry Belousov, an economist and deputy director of the Center for Macroeconomic Analysis and Short-Term Forecasting in Moscow, said last month.
"Barring an unseen financial disaster, the economy is unlikely to collapse," wrote Aleksandr Kolyandr, a former banker and financial journalist who is now a fellow with the Center for European Analysis, a Washington think tank. "But it will continue to worsen, and the Putin regime's room for maneuver is fast narrowing."
Stagnation Or Stagflation
For months, policymakers and economists alike have warned that the party was over for the war economy. Some prominent business leaders, such as German Gref, who heads the state-owned bank that used to be known as Sberbank, warned of "stagnation" -- when slow economic growth is accompanied by high unemployment or high inflation.
With Putin's tacit approval, the head of the central bank, Elvira Nabiullina, moved to tamp down inflation by raising lending rates. Figures released by Rosstat last month showed the effort has succeeded with price growth slowing to 5.6 percent in 2025.
Rosstat now forecasts the economy to grow by a creeping 1.1 percent in 2026, as compared to 4.9 percent two years ago.
Business leaders, meanwhile, complained they were staggering under expensive debt.
Worried about declining revenues needed to sustain its military spending on the war in Ukraine, the government hiked the national value-added tax by two percentage points, adding further pressure on prices.
The result, in early 2026, is crosscurrents that strain finances for average Russians such as Aleksei, a 55-year-old cultural worker who owns a house in a suburb of Ufa.
Like Vera, he asked that he be identified by a pseudonym to avoid drawing police scrutiny.
"Money is becoming increasingly scarce," he told RFE/RL. "Utility bills are skyrocketing. They're constantly being recalculated, and not in the consumer's favor."
"Food has also become very expensive, and we have to look for substitutes," he said.
Russian media have taken notice.
"Cucumbers for the price of avocados," the Moscow tabloid Moskovsky Komsomolets said, highlighting official data showing cucumber prices had jumped by 43 percent since January 1. Tomato prices have increased 21 percent.
The economic uncertainty has also led an increase in economic anxiety for a growing number of Russians, according to public opinion surveys.
"Rising prices and impoverishment of the population is the main problem" among educated Russians, the newspaper Nezavisimaya Gazeta wrote earlier this month.
"Russia is facing increasingly severe economic challenges and is neglecting almost all nonmilitary sectors as the war in Ukraine drags on," Estonia's military intelligence said in its annual threat assessment report. "As a result, the risk of economic and social instability is set to rise in 2026."
Bank On This
One of major crosscurrents also buffeting the economy is a drop in oil and gas revenues, which the Kremlin has relied on to help pay for the war.
New US and EU sanctions have finally crimped Moscow's ability to export its hydrocarbons, including to its two main buyers: China and India. Revenues dropped by nearly two-thirds, from 1.12 trillion rubles ($14.5 billion) in January 2025 to 393 billion rubles ($5.1 billion) last month, according to state statistics.
"This will have a strong impact because the Russian budget isn't made up of just some small government expenditures and huge expenses on the war," Igor Lipsits, a Russian economist who lives outside the country, told Current Time. "It's a gigantic source of income for the entire economy. Russia's economy is heavily dependent on government procurement."
Some experts, including Lipsits, as well as the Center for Macroeconomic Analysis and Short-Term Forecasting, say the banking sector is now in crisis because of businesses unable to pay off high debts, defaulting on loans.
"The financial crisis currently engulfing Russia will quickly lead to many public sector employees regularly losing their salaries. And then this will spill over into pensions," he told Current Time.
Pensions for Russia's aging population are a third rail for Kremlin politics. Reforms to the national pension system, including raising the retirement age, touched off national protests in 2018.
Rosstat's new figures show pensions have fallen below 24 percent of average earnings -- well below the government's target rate.
