cross-posted from: https://mander.xyz/post/47682130

Restaurants and cafes are closing down in Russia at the fastest pace since the start of the war in Ukraine four years ago as consumption stalls even in affluent Moscow.

The closures, visible on streets from the capital to Vladivostok 6,500 km (4,000 miles) east on the Pacific Ocean, point to a significant slowdown in Russia’s $2.8 trillion economy, which has so far proved surprisingly resilient in the face of stringent Western sanctions.

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High interest rates, higher taxes, rising prices and a $20-per-barrel discount for Russian oil are taking their toll - even in Moscow, a vast urban area of 22 million people that has been largely insulated from the worst impact of Europe’s deadliest war since World War Two.

“To let” signs are prominent in retail spaces across the capital. Sales of new light commercial vehicles and trucks, a good indicator for the health of the retail and construction industry, fell by 38% to 147,000 units in 2025 and have continued to fall in the first weeks of 2026, Autostat said.

Data from Sberbank, which as Russia’s biggest bank sees the ripples of expenditure across the economy, showed that the fall in the number of catering outlets in January was the biggest since 2021 and that restaurant spending hit the lowest in three years in November-early December 2025. The change is especially striking as major Russian cities saw a restaurant boom before the pandemic, and some politicians bridled at what they saw as Moscow’s “decadent frivolity” while soldiers were being killed or injured at the front.

Overall, real consumer spending growth fell to zero in February for the first time in two years, Sberbank data showed. Russia forecasts economic growth of 1.3% this year after 1% in 2025, 4.9% in 2024 and 4.1% in 2023. The International Monetary Fund forecasts 0.8% growth for 2026.

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Russian sources say that while there are certainly problems in the economy, it is still performing remarkably well and they dismiss suggestions of its demise as premature. Besides, Putin is unlikely to change course on Ukraine due to restaurants shutting their doors, they said.

Nevertheless, Putin earlier this month told top economic officials to restore the growth rate and urged them not to simply monitor prices. Just 10 days later, the central bank cut rates by 50 basis points to 15.5%.

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Borrowing costs - advertised by major banks at about 18-19% for unsecured loans to business - have hit small businesses and consumers hard, especially after some lenders imposed stricter limits on consumer credit.

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