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The government is trying to curb rising consumer prices ahead of Putin’s expected landslide victory in March’s presidential election. For this reason, the central bank raised the key interest rate to 16 percent two weeks ago.
Two weeks ago, Putin himself even apologized to people for the significant increase in egg prices in a live broadcast during the usual annual press conference. Their price has increased by 43 percent since the beginning of the year. According to the central bank, the price increase is also accelerating as the price increased by 4.6 percent in the week ending December 18 compared to the previous week.
Putin blamed the price increase on the government, which, in his opinion, “did not approve imports in a timely manner.” At the same time, he added that domestic egg production has not increased despite higher demand. “I promise that the situation will be resolved in the near future,” he said.
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Just hours later, the Agriculture Ministry announced that it would eliminate import tariffs on eggs in the first half of next year while increasing its imports from “friendly” countries that have not joined Western sanctions imposed because of the war, reported the Financial Times (FT).
These countries include Turkey and, more recently, Iran, from which Russia will begin importing eggs, the Interfax agency wrote.
Just last year, Russian Poultry Association President Vladimir Fisinin boasted that the poultry industry meets 100 percent of domestic demand and also supplies products for export.
The Russians also imported eggs from the Czech Republic
According to The Observatory of Economic Complexity, a website that collects and visualizes international trade data, Russia was the world’s third-largest egg importer in 2021, with the country importing the most eggs from France, Germany, Belarus, Turkey and the Czech Republic.
The Russian economy will be driven this year by record defense spending and rising energy export prices. Thanks to this, according to Putin, gross domestic product growth will reach 3.5 percent this year. The economy shrank by 2.1 percent last year.
However, despite GDP growth, the Russian economy is overheating as import dependence and limited access to world markets increase inflation, the FT wrote. After all, this was confirmed by the central bank itself during the last interest rate increase. “Foreign trade and financial restrictions complicate logistics chains and financial transactions and weaken demand for Russian exports,” she said.
Russia expects a smaller budget deficit this year
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