Many Russians are cutting their New Year's spending this year amid economic uncertainty after nearly four years of war in Ukraine, despite a slowdown in the official inflation rate and falling prices of some basic goods, Reuters reported, quoted by BTA.
Inflation is expected to fall below 6 percent this year from 9.5 percent in 2024, but this is at the expense of a sharp economic slowdown, as the key interest rate remained at its highest level since the early 2000s for almost six months in 2025.
The Russian economy has also been hit by Western sanctions imposed after Moscow annexed Crimea in 2014 and after the full-scale military invasion of Ukraine in February 2022.
“I understand that this is the situation in the country right now, but what can we do? We still have to eat“, says Nadezhda Siverskaya, a 70-year-old pensioner from a town near Moscow who earns extra income as a domestic helper.
“Either we choose something cheaper depending on what we are going to cook, or we prepare more affordable food“, she adds as she chops the ingredients for the Russians' favorite New Year's salad - potatoes, eggs, sausage, pickles and mayonnaise (Olivier salad).
The government has focused on basic food items such as potatoes and eggs through a set of policies aimed at curbing price increases. Potato prices have fallen by 22 percent this year, and eggs by 20 percent.
The overall price of the popular salad will increase by 5 percent this year, compared with 8.5 percent in 2024, according to calculations by RIA Novosti, based on average prices.
Some people see a difference from the previous year, when price increases were out of control, and give some credit to the authorities and traders for containing them in 2025.
“We understand that everything is more or less within the framework of inflation. Honestly, I can't say that I have noticed a serious increase in prices over the past year,“ says Muscovite Elena, who declined to give her last name.
Despite these successes, inflation expectations – an important indicator that the central bank takes into account when setting the key interest rate, have risen in the past two months and remain at “persistently high“ levels.
A representative of the Central Bank of Russia, who requested anonymity, told Reuters that people tend to notice price increases but ignore price decreases. A planned increase in some taxes in early 2026 is also weighing on sentiment.
A survey conducted this month by the independent Levada polling agency showed that 34 percent of Russians ranked price and tax increases as the most important event of 2025, ranking it ahead of talks between Russia and the United States in Alaska in August and the Ukrainian drone attacks.
"We will definitely not buy red caviar this year because the prices are too high," said Muscovite Karen, who also declined to give his last name, referring to salmon caviar, a traditional New Year's delicacy.
He added that his family had switched to online shopping, which is usually cheaper than in brick-and-mortar stores.