The sanctions imposed following Russia’s invasion of Ukraine have had a pronounced effect on consumer prices and product availability within the country. This study employs daily online price data to bypass potential distortions in official statistics, providing a granular analysis of how trade and financial restrictions have influenced Russian markets.
The findings indicate a notable rise in inflation, with average consumer prices increasing by approximately 11.7%, largely driven by fluctuations in the exchange rate and interest rates. Certain product categories, particularly those with high exposure to imports or foreign supply chains, experienced stronger disruptions. These included food items such as meat, fish, and beverages, along with major and small household appliances, spare parts for personal vehicles, and materials used for dwelling repair and maintenance, all of which exhibited large increases in excess inflation or supply volatility. The interplay between financial sanctions and trade restrictions played a crucial role in these outcomes, with the former causing significant shifts in product availability in fifteen product categories and the latter – in six.
Beyond price hikes, sanctions also contributed to reduced product availability across various sectors. The financial constraints imposed on Russian firms compromised supply chains and limited access to critical goods. Although the Russian government and retailers have attempted to adapt by encouraging domestic substitution and reorganizing supply chains, the data indicates that product availability in many categories remains below pre-invasion levels, suggesting that these measures have only partially offset the disruptions.
In the study, the central role in transmitting the effects of sanctions to consumer prices is attributed to exchange rates. The depreciation of the ruble, compounded by financial restrictions, has led to rising costs for imported goods, further amplifying inflationary pressures. Interest rate hikes, implemented to stabilize the currency, have added another layer of complexity, influencing both consumer purchasing power and market stability.
Authors show that, while Russia has adapted by adjusting trade relationships and emphasizing domestic alternatives, the impact on price stability and product availability remains significant. These findings provide valuable insights into the economic mechanics of sanctions, shedding light on how financial and trade restrictions interact to shape market outcomes.
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