Prices in Crimea growing much faster than residents’ incomes. Eggs and sugar grew in price by one third

13 March 2019, 15:01
Фото: ТАСС
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Tetyana Ivanevych,
QHA media

Since the beginning of the year, the cost of basic foodstuffs and some utilities have risen sharply in the illegally annexed Crimea. This is evidenced by the data of Federal State Statistics Service of Crimea “Krymstat”. The undoubted leaders were eggs and sugar – in the period of January-February, their prices increased by 30% compared to the same period in 2018.

In addition, in the first two months of the year, prices increased by 5–15% for a number of products and goods.

For example, bread and bakery products went up by 13% in price, meat and poultry – by 15%, butter – by 12%, potatoes – by 10%, sunflower oil, milk and cereals on average – by 5-6%. Gasoline went up by 12%, and medications – by almost 5%.

Also, the cost of municipal and other services rose significantly. Prices for hot water increased the most – by 21% and heating – by 19%.

Among other services, the cost of passenger transportations has increased significantly – by 11%, medical services – by 8%, services of foreign tourism – by 13%.

It is worth noting that, among the 47 positions promulgated by Krymstat, the cost of only two decreased in January-February of this year: Cold water disposal became cheaper by 6.5% and prices for TV and radio equipment went down by 2%.

The situation with the price dynamics in the Crimea in early 2019 is strikingly different, in negative sense, compared to the same period last year. In January-February 2018, the Crimean statistics did not record any sharp or massive increase in prices for basic products, goods and services.

In Russia, basic foods have risen in price since the beginning of the year as well. Thus, eggs went up in price by 24%, sugar – by 30.5%, meat and poultry – by 11%. Given that in January-February 2018 compared to the same period in 2017, prices for these products decreased by approximately the same order – for example, sugar then fell by 21%, eggs – by 12.5%, meat and poultry – by 3%.

Author's view:

One of the explanations of such price hikes may lie at the political level. Probably, the price stability, and even the drop during the first two months of 2018, was due to the presidential elections of the Russian Federation held in March. And the second question is whether the prices were restrained artificially or the necessary statistics were drawn. Now there is no such deterrent factor as the presidential election, so the prices for the most “populist” goods have returned to their real level. In the future, unfavorable economic dimensions will push them up. The same trend has affected the Russian-occupied Crimea in full. This year local “elections” will take place in Crimea. One can assume that the sharp rise in prices and, accordingly, discontent of the Crimeans, will facilitate the task of Russia to replace the Crimean political elites with more loyal and controlled ones.

In February, the Ministry of Economic Development of Russia came up with deteriorating inflation forecast for the 2019 – up to 5%. Peak values are expected from March to May at 5.4%.

Russian statistics indicate that the occupied Crimea noticeably lags behind the regions of the Russian Federation in terms of income and wages: If the cash income of the Russian population averaged 33 thousand rubles (about 500 USD) last year, in the Crimea it was 22 thousand rubles (about 333 USD), and in Sevastopol – 27 thousand rubles (about 408 USD).

The average salary in the Crimea in 2018 was 29 thousand rubles (about 439 USD), while the average salary for the Russian Federation exceeds 43 thousand rubles (about 650 USD).

Moreover, Crimeans themselves argue that the real wage is most often lower than the official figures, while prices, on the contrary, are higher than those shown in statistics.

But even according to such statistics, incomes of Crimeans are growing at a noticeably slower pace than expenses.