Russian state analysts: worsening standard of living not tied to embargo

Russia's falling living standard is the result of falling incomes and it's unrelated to the food embargo imposed against a number of Western countries, reported the news agency TASS on Monday, citing “Food of the Embargo: Year in Review 2015,” a document produced by the Kremlin’s team of analysts.

The authors of the report cite public opinion polls suggesting that Russian citizens have to economize on expensive food products, such as cheese, sausage, meat, poultry, fish, seafood, and vegetables. Baked goods, cereals, and pasta remain widely accessible to the population.

“This indicates a worsening in the standard of living, but the result of this deterioration is, to a greater extent, a decline in people’s income, rather than the food embargo,” the document concludes, noting that 2015 saw a sharp decrease in the income of Russian citizens, with gross disposable household income and gross annual earnings falling by 4 and 9.5 percent respectively.

The year also saw a change in consumption patterns, with a 38% increase on expenditure on foodstuff and a reduction in expenditure on non food-items. Though the former is much greater than expected in developed countries, which usually see an annual increase of 10-20 percent in spending on foodstuff, and even higher than what some developing countries saw in 2015 (Brazil: 17.8 percent), it still remains lower than the increase observed in many of CIS countries, the analysts said.

• In August 2014, Russia introduced a ban on the import of certain food items (including beef, pork, poultry, fish, milk, and dairy products, certain vegetables, and fruits and nuts) from the European Union, the United States, and Canada, in response to anti-Russian sanctions imposed by the Western countries in light of events in Ukraine. The ban temporary increased the cost of the remaining products in question within the country. In light of the ban, Russian retailers were forced to turn to domestic suppliers, as well as to suppliers from outside the European and American markets. Domestically, the fastest growing sectors for banned foreign products are those of fish, nuts, and vegetables. The ban has cost Western suppliers (not including Turkey and Ukraine) US $9.3 million, claims the report.
• On June 24, 2015, Vladimir Putin signed a law “on the extension of certain special economic measures in order to ensure the security of the Russian Federation.” Implemented on August 6, 2015, the law is effective for one year.
• In February 2016, Russian Prime Minister Dmitry Medvedev said that it would be “reasonable” for both the Russians and the Western players to reciprocally withdraw all sanctions and to name a specific date from which to proceed.