THE IMPACT OF WESTERN SANCTIONS ON ORDINARY RUSSIANS

The daily life of ordinary Russians not just the country’s political elite or super rich oligarchs will be affected. All in all, this amounts to a grim scenario for Russian consumers and businesses. The economy is likely to plunge into recession. The new sanctions will severely impact the living standard of ordinary Russians. No matter how much money Russians have, they cannot transfer it abroad, they cannot get it out of their bank, and there’s nowhere to invest. The longer it goes, the more difficult it will become.

1. Russian individuals and businesses will not be able to access any foreign bank accounts that they have.
2. Severe inflation (Inflation in Russia was already a sensitive issue prior to the invasion of Ukraine, running at 8.7%)
3. Stock market crash and other forms of financial panic will inflict pain on the Russian people from billionaires to government officials to middle-class families.
4. Sanctions will inevitably affect daily life in Russia.
5. Russians will be paying higher prices for many types of goods
6. Higher food prices.  In 2021, global food prices rose 28% and Russia imposed price caps and export duties on some basic food items. 75% of Russians spent around half their income or more on food
7. Higher prices for clothing
8. Delays in payment of benefits
9. Pensions could be severely devalued by a crash in the ruble or Russian markets
10. Foreign travel will become more expensive as rubbles buy less currency abroad
11. It will be extremely difficult for Russians to buy imported goods at reasonable prices (imported goods make up over half the consumer basket).
12. Russians who have borrowed money such as homeowners with mortgages or business owners who have taken out loans will be hit by double interest rates.
13. It will be harder for Russian businesses to raise money to invest, meaning less growth and employment in the medium to long term.
14. A broad range of goods, from smartphones to automobiles will disappear from Russian stores.
15. Shortages of medicines and medical equipment (66% of medicines are imported)
16. Supply chain interruptions could cause Russian factories to shut down