Why is everything so expensive?
Russians were shocked by the new prices.
Tatiana Rybakova
Social media is filled with videos of Russians returning to stores after the New Year holidays, horrified by the new prices. The shock is understandable: even according to official Rosstat data, prices rose more in the first 12 days of 2026 than in all of January 2025. Among the leaders are the Far East and Dagestan. And by the end of the year, Chuvashia may also become a leader.
Everyone is in shock
On the Internet multiply Videos and posts from Russian shoppers stocking up on groceries after the New Year holidays. The mildest description of their emotions is "shock," and the strongest expressions are hardly worth quoting. Rosstat also noted the jump in inflation: according to its According toIn the first 12 days of January, consumer prices in Russia rose by 1,26%. This is more than six times higher than the growth in the last monitored week of last year, from December 16 to 22. Then, Rosstat reported encouraging news that consumer price growth fell to 0,2%. For the entire month of January last year, prices rose by only 1,23%.
Shoppers themselves see a much larger price increase when calculating their own expenses on their usual shopping list: for some, it's 30% more expensive, for others, almost double that. Judging by According to According to Rosstat, the biggest price increase was for fruit and vegetable products: an average increase of +7,9%, including cucumbers +21,3%, tomatoes +13,6%, potatoes +5,8%, white cabbage +4,0%, carrots +3,8%, beets and onions +3,6%, apples +2,4%, and bananas +0,9%. Vodka also saw a significant increase in price, up 4,2%. Canned baby food also increased in price: meat by 1,4%, fruit and berry by 1,1%, and vegetable by 1%. Everything else increased in price by less than 1%, while some even symbolically decreased in price: granulated sugar and millet by 0,3%, dry infant formula by 0,2%, and salt by 0,1%.
But here is a customer from Rostov пишетAnother customer at the Moscow Globus store reports that the price of Monarch instant coffee has increased from 700 to 1300 rubles. Another customer reports that chocolate bars have been locked in alarm-equipped lockers because a chocolate bar now costs 639 rubles. Many also note that the chocolate bars have dramatically decreased in weight because manufacturers are trying not to shock customers with the new prices. So, is Rosstat lying? No, it's simply not telling the whole story: coffee, like chocolate, is not included in the list of products monitored by the agency.
By the way, starting this year Rosstat again changed The price tracking methodology has been updated, changing the list of goods and services it monitors. And no, coffee and chocolate are no longer included. Now, price monitoring will include beets, bananas, and the medications Rengalin and Ergoferon, while excluding metal roofing tiles, bromhexine, Russian multivitamins without minerals, and travel to Greece. The statistics themselves, incidentally, will be released later: weekly statistics will be recorded on the following Friday, not Monday, and monthly statistics will be recorded on the last five days of the month, not the 20th-25th.
Who is to blame?
The Ministry of Economic Development blames everything on the VAT increase from 20% to 22%, claiming that businesses have increased prices accordingly. But businesses started Although they raised prices last year, that didn't stop them from raising them again. And by no means by 2%—logistics services have gone up in price by 10-20% since the beginning of the year. said Sergey Katyrin, head of the Russian Chamber of Commerce and Industry, said: "And fruit and vegetable prices have risen even more: greenhouse vegetables are understandably more expensive than seasonal ones, but their prices usually peak before the New Year. The Federal Antimonopoly Service, however, has promised to look into the greenhouse sector, but this won't bring refunds to consumers. Quite the contrary: if producers are fined by antimonopoly authorities, they'll compensate for it through lower prices—unless they do it quietly."
In fact, what many experts had predicted has indeed come true. VAT, they said, is a tax with a multiplier effect—its impact will be felt throughout the economy. It is paid on every transaction, from the producer's purchase of raw materials to the buyer's. Yes, when the finished product is transferred, the VAT is refunded, so theoretically, the buyer is the ultimate payer. But as the raw material—whether oil, metal, or cucumber—is transformed, the added value increases the price, and with it, the absolute VAT amount. Add to this the long (up to six months) VAT refund period and endless disputes with tax authorities, who always try to challenge the refund—and it's clear that transaction costs add up. And ultimately, the buyer pays for all of this.
But the government insisted that the 2018 VAT increase from 18% to 20% had led to a 1,7% increase in inflation. Economists' objections were in vain: the economy was completely different in 2018. Inflation was moderate, as were the inflation expectations of the population and businesses (which is crucial). There were no problems with logistics or imports—any price hike could be mitigated by importing cheap foreign goods. Finally, there were no expectations of a ruble collapse, no budget deficit, and no massive military spending. There were no sanctions, and the Russian economy wasn't teetering between a "bubble" in the defense industry and a recession in other sectors.
The experts were right, but the government took this step quite deliberately – precisely because military spending requires money, and in the context of falling oil prices and collapse There's nowhere for the budget to get oil and gas revenues from except from the population. The Ministry of Finance has already begun sale gold and currency from the National Welfare Fund - simply because there is practically no "real" money left there - there is no time for citizens' problems with expensive cucumbers.
The most expensive ones
Complete inflation statistics for January, broken down by region, have not yet been released. For now, we can only judge by fragmentary reports in the regional press.
Yes, on Far East Prices are traditionally higher than the Russian average due to the long transportation distance and the high share of imports, primarily from China and other Southeast Asian countries. Fruit and vegetable products suffered the most (an average increase of 7,9%) and electricity.
Dagestan Also traditionally among the leaders in inflation—logistics and the prevalence of market prices for food are again to blame: in the republic, vegetables are much cheaper in season than in winter due to a lack of greenhouses and specialized warehouses. Plus, the republic's prices are growing at an accelerated pace. rates – from October they will grow by almost 20%, one of the highest rates in Russia.
The leaders in terms of tariff growth will also be Chuvashia – by almost a third. Overall, the Volga Federal District was one of the leaders in consumer inflation.
A camel has two humps, and so does the current inflation.
So far, according to the data SberIndexInflation eased slightly for the week of December 12–18. Grocery prices rose by 2,8% year-on-year, up from 9% in December; catering prices rose by 4,3%, up from 20,6% in the same period; and services prices rose by 7%, up from 14,3% in December. Again, we're talking about year-on-year growth, meaning weekly inflation is multiplied by the number of weeks in a year. Furthermore, SberIndex calculates inflation slightly differently than Rosstat: not based on an approved basket of goods, but on Sberbank clients' banking transactions.
True, non-food prices remain high—up 15% year-on-year, compared to 14,7% in December. But this is a harbinger of the technology tax on electronics—we can expect electronics to become one of the most inflationary items this year.
However, it is likely that the January inflation spike will remain isolated – businesses have taken the VAT increase into account and will continue to focus on consumer demand, which is cooling downPlus, administrative pressure on businesses will now come into play: the FAS was mentioned above, but local authorities often negotiate with manufacturers and retailers to freeze prices in exchange for, for example, rent or other payment benefits.
It's also worth remembering that this year marks the State Duma elections, so angering the population is not a good idea for the authorities right now. So, even if inflation remains elevated in the winter, it will likely begin to slow in March, as the pre-election period begins. The onset of the fresh vegetable season will also help – at this time, producers and retailers typically try to free up warehouses to receive new produce and try to keep prices low. Then, the fresh produce season will arrive. So, barring any shocks, we can expect inflation to decline by the fall.
But in the fall, after the elections, there will be a second round of price growth.
"Inflation will have two 'humps' this year: we've already passed the first, and the second awaits us in the fall. It's no coincidence that the government postponed the main tariff increase from July 1st to October, the period following the State Duma elections," says economist Sergei Petrov.
They will grow up rates Significantly: from 8% in Chukotka to 22% in Stavropol Krai. This is an average—tariffs for certain utilities could increase much more. And these are forecast figures: as mentioned above, in Chuvashia, some tariffs could increase by as much as 33%.
It's important to understand that tariffs will increase not only for households but also for businesses. This means further price increases. However, for businesses, the increase in transport tariffs is more important – the transport component of some goods, such as bread, can reach 70-80% of the cost. But logistics, as already mentioned, will also increase in price by 10-20%.
However, there are also factors that are cooling inflation. True, they are not very pleasant. For example, recession, which, according to analysts at the Center for Macroeconomic Analysis and Short-Term Forecasting (CMASF), is already came in civilian industries. Business in response cuts down Salaries are being cut, bonuses are being reduced, and even employees are being transferred to shorter work schedules with corresponding pay cuts. And while labor shortages remain a constraint, if companies begin closing, the process will only accelerate.
Consumers, in turn, begin save They spend less and save more—fortunately, deposit rates are still quite favorable. The decline in demand, in turn, hits business revenues, forcing them to adopt new anti-crisis measures. This creates a vicious cycle that could lead to a full-blown economic recession, and with it, a decline in inflation.
Unfortunately, however, inflation won't necessarily decline. It's quite possible that we'll be heading for a period of stagflation: a combination of recession and rising prices. After all, the main factor driving today's inflation is government action—rising VAT, excise taxes, duties, tariffs, and so on. The government has no shortage of resources—if businesses start closing and tax collections fall, it can raise taxes on the population—for example, by simply lowering (or not indexing to inflation) the threshold for paying the increased personal income tax. Fines could be raised again and their collection could be strengthened. The self-employed could be reclassified as regular taxpayers ahead of schedule, before the planned 2028 deadline, or the self-employed tax itself could be increased. Many other things are possible, because the government's primary goal now is to find the money. And it will find it.
