Driving a taxi in the Russian capital was never very lucrative for Said, a Tajik migrant living in the Moscow region, but it paid the bills.<\/p>\n
Now, he says, gasoline has jumped by more than 30 percent in recent weeks \u2013 from 45 rubles a liter to 60. All told, his daily take-home pay is just three-quarters of what he used to net, he says; he can barely cover living expenses.<\/p>\n
\u201cYou work, and you pay your rent, and you pay for your gas \u2014 those are all your expenses,\u201d he told RFE\/RL, asking only to be identified by his first name.<\/p>\n
And the Russian capital isn\u2019t the only locality seeing a spike. \u201cSeems that Russia is on the brink of a full-scale fuel crisis,\u201d one of Moscow\u2019s largest tabloid papers declared<\/strong><\/a> last month, pointing to growing number of regions reporting shortages and price hikes.<\/p>\n The shortage is blamed<\/strong><\/a> mainly on a decidedly non-economic factor: a targeted drone campaign by Ukrainian forces that\u2019s knocked out as much as 17 percent of Russia\u2019s refining capacity.<\/p>\n But it\u2019s rattling Russian consumers who are increasingly feeling the effects of a broader slowdown. After years of torrid growth, propelled by government spending to fuel the war on Ukraine, Russia\u2019s economy is grinding to a crawl.<\/p>\n For the central bank, which is struggling to tamp down soaring inflation, the hope is this will help rebalance the economy. For the Kremlin, the hope is the slowdown does not erode support for the Ukraine war.<\/p>\n \u201cThe crisis is ongoing, it is developing, it is growing, it is intensifying,\u201d Igor Lipsits, a Russian economist, told<\/strong><\/a> RFE\/RL\u2019s Tatar-Bashkir Service.<\/p>\n \u201cAnd it is becoming impossible to hide it completely, and lying completely is also not good, because then suddenly the population will wake up and say: \u2018Why didn’t you tell us that the situation in the country is bad\u2019?\u201d<\/p>\n For other economists, the deceleration is neither critical nor unanticipated.<\/p>\n \u201cThis is the expected slowdown in growth. Currently, it looks very much like a soft landing, not an acute crisis of any sort,\u201d said Laura Solanko, an economist at the Bank of Finland\u2019s Institute for Emerging Economies.<\/p>\n Economic Downshift<\/strong><\/p>\n For more than two years now, Russia\u2019s economy has chugged forward like a truck that has a powerful engine but wheels that are increasingly out of balance.<\/p>\n The truck itself is the product of a national industrial retooling aimed at waging war on Ukraine. Fueled by foreign oil and gas sales, the Kremlin has pumped the economy full of rubles, prioritizing the production of tanks, guns, shells, drones, uniforms, and equipment for soldiers.<\/p>\n Total spending on defense and security reached 41 percent of all spending in 2025, according to government figures — the highest it\u2019s been since the Cold War.<\/p>\n To keep the ranks fully manned, meanwhile, the government has paid out extraordinarily high wages and benefits to entice men to volunteer to fight.<\/p>\n That\u2019s flooded Russia\u2019s poorer regions with cash, but it has also distorted labor markets, pushing up wages and pushing inflation to nearly 10 percent.<\/p>\n That in turned prompted the Central Bank to hike lending rates — which influences things like car loans and mortgages — to tamp down inflation.<\/p>\n The result?<\/p>\n In the first three months of this year, GDP dropped<\/strong><\/a> 0.6 percent compared the previous three months. That\u2019s the first contraction since 2022, when, amid a battering by Western sanctions and Western companies pulling out of the country in the wake of the invasion, the economy contracted 1.4 percent.<\/p>\n Russian President Vladimir Putin\u2019s top advisers have publicly warned<\/strong><\/a> of a slowdown. Finance Minister Anton Siluanov told Putin that that the economy would grow just 1.5 percent.<\/p>\n Days later, Economics Minister Maksim Reshetnikov warned the economy<\/strong><\/a> was \u201ccooling down faster than expected.\u201d<\/p>\n German Gref, who heads state-run banking giant Sberbank, warned of possible \u201cstagnation.\u201d<\/p>\n Putin has tried to tamp down fears of wider slowdown.<\/p>\n “I\u2019m certain that in the end we\u2019ll succeed in resolving the issues, to support the necessary pace of economic growth while keeping inflation at a minimum,” he said during a business forum<\/strong><\/a> in Vladivostok.<\/p>\n \u201cEveryone also understands that if inflation overwhelms the economy, it will not end well.”<\/p>\n