### Summary
Russia's currency, the ruble, has plunged to a 16-month low, leading to surging prices of sushi due to the country's economic challenges and rift with the West.
### Facts
- 💰 Russia's currency, the ruble, hit a 16-month low last week, as the country's current account suffers from Western sanctions.
- 🍣 Local prices of sushi in Russia are expected to surge by as much as 30% in the coming weeks due to the weakened ruble and strained relations with the West.
- 📈 Russia's official inflation rate reached a five-month high of 4.3% in July, but some economists estimate it to be over 60%.
- 🍱 Restaurateurs in Russia are already facing increased costs of sushi ingredients, such as rice, fish, and seaweed, which are imported and dependent on the dollar exchange rate.
- 💸 The embattled ruble sank past 100 to the dollar, prompting the Russian central bank to raise interest rates significantly.
- 📉 Capital outflows, reduced reliance on Russian oil by European nations, and falling export revenues have added to Russia's economic challenges.
- 🇷🇺 President Vladimir Putin held an emergency meeting to discuss measures for stabilizing the exchange rate, including export restrictions and limits on foreign currency movement.
Russian President Vladimir Putin has called for measures to control rising inflationary risks in the country and maintain a high level of industrial output, as he prepares for re-election and deals with the strain of military operations in Ukraine.
Russia's Finance Minister, Anton Siluanov, has stated that the country's economy is expected to grow by 2.5% or more in 2023, with inflation predicted to be around 6%.
The Russian central bank has raised its key interest rate to 13% in response to inflationary pressures and a weak rouble, and warns that rates will remain high for a considerable period of time, with further rate increases possible in the future.
Russia is predicted to amass a significant stockpile of air-launched cruise missiles to target Ukraine's critical infrastructure during the upcoming winter, according to the UK Defense Ministry.
The Chief of Defence Intelligence of Ukraine believes that if the war of aggression against Ukraine continues, the Russian economy will only hold out until 2025 and their arms supply will dry up in 2026 or earlier.
Nouriel Roubini, CEO of Roubini Macro Associates, predicts that advanced economies will not achieve 2% inflation in the near future due to structural changes in the global economy, suggesting that a new normal of 3% to 4% inflation may be more likely over time.
The war in Ukraine has significantly impacted European economic growth and increased inflation, with the Swiss National Bank stating that the consequences are likely to worsen in the medium-to-long term, according to a study.
Russia has revised its forecast for natural gas exports in the coming years, predicting a significant decrease in prices.
Russia's economy is expected to grow by 1.5% this year, defying previous projections of contraction and proving more resilient than expected to Western sanctions due to rising oil prices and new export markets, though an eventual slowdown is still predicted.
The Russian rouble's decline is causing tensions between the central bank and finance ministry, as inflation rises and growth slows, threatening the country's ability to wage war effectively.
Russia is planning to increase its defense spending by 30%, suggesting that it is preparing for the war in Ukraine to continue for years and hoping that Western support for Ukraine will decrease.
Russia's economy is being increasingly structured around war, with nearly one-third of the country's spending next year devoted to defense, redirecting funds from sectors like health care and education; however, the economic impacts of the war, including inflation and a weakened ruble, are causing concerns for citizens and the government alike.
Russia's economy is predicted to grow by 1.1% in 2024, slower than previously expected, placing it at the bottom of the IMF's list of major emerging markets and developing economies.
Russia's rouble strengthened against the US dollar after President Vladimir Putin ordered the mandatory sale of foreign currency revenues to support the currency, but experts warn that businesses should plan for a weaker rouble in the long term.
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