A Levada Center survey conducted in January found that 78% of Russians believe the country is in an economic crisis, an increase from 74% in September. Retail sales are expected to shrink for a record 25th month in January, reports Bloomberg, while a decline in real disposable incomes extended into a second year. Each lost more than 5% in 2016, compared with a contraction of only 0.2% in gross domestic product.
Uncertainty over the length and severity of the crisis is also increasing. The only thing Russians seem to be sure of is that the crisis will not be over soon; almost none of the respondents could see an end to the crisis within six months.
Likewise, families are expecting prices to rise and by significant amounts. Inflation remains one of the biggest concerns for the middle classes.
The share of spending on food is rising with 41% of the population saying they spend about half of all their income on food, up from about a third for most of the boom years. However, over the last two decades the category “spend all our income on food” has dramatically declined to the benefit of the “spend less than half” category.