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Russian consumers already feel the weight of economic sanctions

The economic sanctions from the West are already beginning to be felt by Russian consumers, but more so in Moscow or in big cities. There are fewer job openings and more stores closed.

For a large part of the Russian population – the majority are employed by the state – it may seem that nothing has changed, as they have kept their jobs and prices still seem not to have wide variations. However, there are already some indications that the sanctions have begun to affect the Russians, reports theFinancial Times“.

Natalia Klyueva began her search for a new job in Moscow in February – just before the Russian invasion of Ukraine and Western sanctions. But her experience in retail is worthless when, in her eyes, business is “frozen” and Western companies have left the country.

Even so, this is a case that can be characterized as an exception, since in Russia the majority of workers are employed by Moscow and increases in retirement pensions and the minimum wage have recently been approved. Additionally, the Kremlin has given incentives to the private sector to put workers on lay-offs rather than laying them off.

And even inflation, which almost reached 18% in April, has already slowed. “Prices have gone up, yes, but in general not much has changed,” said Tatiana Mikhailova, an economist who lives in the capital.

As for employment, not everything remains the same. Although the unemployment rate remained stable at 4%, vacancies fell. According to online recruiting platform HeadHunter, the number of job postings dropped 28% in April compared to the month before the war. Job postings in marketing, public relations, human resources, management and banking are down between 40% and 55%.

And when it comes to retail, the evidence is there: after the departure of western brands, around 15% to 20% of stores in Moscow malls are closed, according to Knight Frank Russia.

In offices, it is estimated that by the end of 2022, 20% of offices in Moscow will be unoccupied.

Furthermore, there is already a change in consumption habits, since the shelves of wine – mostly imported – are empty, but the same happens with other imported products. And electronics imports from the leaders in the Russian market (Samsung and Apple) have fallen – although it is not known for sure how much, as the Kremlin stopped publishing this data.

However, Russia is a huge country and these effects are mostly felt in Moscow or the big cities.

Source: With Agencies

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