Inflation and Labor Shortages Weigh on Russia

Thanks to tourism and state-funded reconstruction, Yaroslavl on the Volga is among Russia’s more resilient cities. However, even its residents are not spared from high inflation, expensive loans and shortages of fuel and workers ahead of the parliamentary elections.

In a strictly controlled political environment, where anti-war candidates are largely barred from running, no significant change is expected. The Kremlin, however, views the vote as an indicator of war fatigue stemming from the conflict in Ukraine.

Local business owners speak primarily of a shortage of young employees, but they do not want to link this problem to military conscription and casualties on the front lines. Others point to the declining birth rate. The population’s purchasing power is also weakening; for example, Varvara, a retiree, supplements her 17,000-ruble ($207) pension by selling mushrooms.

After growth slowed from 4.9% in 2024 to 1% last year, the government expects growth of only 0.6% for 2026. Inflation exceeds 6%, and the central bank is keeping interest rates at 14%.

The situation has been exacerbated by sanctions, higher taxes and Ukrainian drone attacks on refineries, warehouses, agriculture and tourism. Russians stood in line for hours to get fuel, domestic tourism fell by 6% and prices for basic necessities continued to rise.

(Reuters, bak)