Russia's wartime consumer boom is cracking as shoppers tighten their wallets

"After years of wartime splurging, Russian shoppers are tightening their grip on their wallets - a shift that hints at growing stress in the country's economy. Growth in consumer spending has weakened across most regions, the Central Bank of Russia said in a report published Wednesday. In October and November, demand softened even as unemployment remained near historic lows and inflation expectations ticked higher."

"Retailers in many regions report weakening demand for big-ticket and nonessential goods, marking a clear cooling after the post-2022 consumer boom. "More subdued consumption may indicate a gradual reduction in labor market overheating and more moderate expectations for future income dynamics," wrote Russia's central bank. Russia's wartime boom is losing momentum It's a notable shift for an economy that witnessed a boom in consumer spending after Russia's full-scale invasion of Ukraine in February 2022, even amid sweeping sanctions against Moscow."

Consumer spending growth in Russia has slowed across most regions as households adopt more frugal behavior and increasingly buy during promotions and discounts. Demand softened in October and November despite unemployment near historic lows and rising inflation expectations. Retailers report weaker sales of big-ticket and nonessential items, signaling cooling after the post-2022 consumer boom. Wage growth has decelerated, firms report reduced manpower demand and less urgency to hire, and many expect modest wage increases in 2026. With oil and gas revenues falling and the labor market cooling, the wartime-driven economic momentum is losing strength and risks broader economic slowdown.

Read at Business Insider