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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Keep it fucking going. Make em suffer their consequences
“Slower economy = more unemployed people. More unemployed people = easier conscripts. Absolute profit!” - Putin, probably
But now there’s even less money and fewer goods to trade for munitions and tech. This is the part where organized crime starts to cannibalize the government that can no longer afford it’s bribes
who’s have thunk a never ending war, with all the costs and sanctions that come with it, would cause an economy to die. WHO COULD HAVE SEEN THIS COMING??
I mean, it works for America. We’re constantly in some military campaigns, in order to fund our war machine companies.
Is it because we don’t get sanctions from other countries?
Well, yes, but a lot of people have seen this coming for the past four years and nothing happened. This time the signs are much stronger. I am hopeful.
I commented here some time ago on the same topic that most economists didn’t predict a sudden collapse in Russia (although some media have been trying to convey such a message).
One of my favourite elaborations is an interview with Russian economist Natalia Zubarevich in 2023 who said back then about Russia, ‘There Will Be no Collapses, but Rather a Viscous, Slow Sinking into Backwardness’. It’s an exceptional interview in my opinion with someone of deep knowledge of the Russian economy. Many of the things we have been observing in the last three years have been predicted by Ms. Zubarevich in the second year of the invasion.
In a recent interview from this week, How the War and Latest Western Sanctions Are Impacting Russia’s Oil Sector, Sergey Vakulenko, a senior fellow at the Carnegie Russia Eurasia Center, argues in a similar way when he describes the situation in Russia’s oil sector.
Because of the war, the oil and gas industry is, first of all, facing serious problems in terms of refining. Looking at refineries, no one-off Ukrainian drone attack has caused long-term damage. But repeat, larger-scale attacks could create a situation where, at some point, it will no longer be possible simply to patch up or repair distillation columns – they will have to be replaced entirely.
If a person is hit once, even quite hard, he or she most likely will not die. But if a person is beaten regularly, he or she, generally speaking, can die. It is not a knife stab to vital organs, but regular beatings from which people can die – not right away, but over time. Moreover, all this diverts money and resources … Theoretically, this could be solved with a sharp increase in investment [in the oil industry]. But then the Ministry of Finance steps in and says: no, we cannot afford to take less rent from the oil sector. The money the oil sector could invest in maintaining production levels is now needed for other purposes, and taxes will not be cut.
And in a chapter in the 2023 book on “Russia’s Imperial Endeavor and Its Geopolitical Consequences” (highly recommended read), Hungarian scholar Dóra Győrffy concludes (opens pdf):
The relative certainty of the long-term decline of Russia stands in contrast to the uncertainties surrounding the prospects of post-war Ukraine. While success is far from guaranteed, Ukraine has a window of opportunity to leave its post-Soviet patronal structures behind, and build a resilient democracy, rule of law, and a strong market economy with Western support. The return of refugees, the inflow of Western capital for reconstruction, access to technology, assistance in institution building, and a strong social commitment to the idea of freedom provide a strong foundation for a new Ukraine embedded in the transatlantic alliance. Achieving this vision is the shared hope and responsibility of Ukraine and the West in their fight against autocracies.
You know, I believe that Putin has a really incredibly competent staff of economists around him that are managing this war very efficiently. While the goals of the war are repugnant, looking at how Nabuillina has managed a very difficult financial and economic situation in a way that ordinary metropolitan Russians barely noticed is impressive.
That said, political collapse does not need to come from economic collapse. I was shocked at how determined Ukraine was to run as fast as possible from Russian overlordship towards the West and Europe, but that left me with the impression that Russians know the advantages of not living in an autocracy, too.
Putin has been gambling on tying himself to Russia herself: his win is Russia’s win, and his loss is Russia’s. I suppose at some point people might be figuring out that Putin is not the same as Russia and that they are better off with a different set of institutions.
I suppose at some point people might be figuring out that Putin is not the same as Russia and that they are better off with a different set of institutions.
They may already be aware of that, it’s just hard to overthrow a dictator as any form of resistance is immediately cracked down. Most of us can (thankfully) not imagine what it means to live under such a regime.
Just a small detail: Nabuillina quit in March 2022, soon after Russia’s full-scale invasion began, though Putin ordered her to hold her position. Did she know back then what was coming? I don’t know, but I fully agree she is a highly competent economist.
Restaurants are the easiest thing to save on. If you feel that you can’t spend money without counting anymore, then you just stop going to restaurants.
That’s bad overall. It shows that only now middle and upper classes started to feel a little tiny inconvenience from the war.
And we want them starving.
They are starving, for cucumbers!
Time for a cuisine pivot to get ahead of the curve:
