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Wed, 31 Dec, 2014 06:22:37 PM FTimes- Xinhua Report , Dec. 31
Olga and Matvei, a newlywed couple, would be bathing in the warm Caribbean for their honeymoon, if the ruble had not slumped almost 10 percent just two days after their wedding.
The couple, like many other Russians planning to travel abroad, suddenly found that they could not afford their trips as the prices for flights and hotels almost doubled overnight.
The ruble's free fall also raised inflation. The Retail Companies Association said food prices in Russia have grown by 20 to 25 percent since the beginning of the year and are expected to grow by 15 percent in the first quarter of 2015.
Russian Finance Minister Anton Siluanov estimated that inflation in 2014 will hit 11.5 percent, the highest rate since the economic crisis of 2008. His predecessor Alexey Kudrin predicted even higher inflation for 2015, saying it may hit 12 to 15 percent.
The impact of the drastic ruble depreciation has already been felt keenly by ordinary people in business.
The "Red Whale" shopping center, one of many in Moscow, looked like a ghost city with only dozens of shoppers roaming its empty hallways.
"I'm afraid we won't resume work after the New Year," said Alexei, a manager in a store of telescopes and microscopes.
"We are afraid that few would buy costly stuff when people care more about daily necessities," he told Xinhua.
For Sergei, a self-employed event manager, said he had lost many major orders a few days after the "dollar-euro uprising against the ruble."
Sergei said his clients were terrified by the ruble's dive.
"It's not a good time to celebrate anything, as it would look like a feast in time of plague," a client of Sergei's told him, as Russian companies are cutting back on lavish New Year parties.
Russia's Economic Development Ministry said Monday that the country's economy contracted 0.5 percent year-on-year in November, the first minus growth since October 2009.
Earlier this month, Economy Minister Alexei Ulyukayev said the Russian economy will contract 3 percent in 2015 if global oil prices remain at the level of 60 dollars a barrel, and will grow by 0.8 percent if oil prices hover at 80 dollars.
The World Bank also said there are substantial risks to the medium-term outlook for Russia's 2014-2016 economic growth.
To fight the economic crisis, the Russian government said it has adopted a plan of anti-crisis measures and is ready for any further economic deterioration.
In addition, the government has provided the banking sector with 1 trillion rubles (over 17 billion dollars) and increased bank deposit insurance by 100 percent, from 700,000 to 1.4 million rubles (approximately from 12,400 to 24,700 dollars).
Although Russians had to give up a lot to adjust to the stagnated economy, many of them such as Matvei and Olga remain optimistic, because they believed that "in the end, things will mend."
"We believe the current hardships won't last long. Besides, in Russia, experienced professionals are in short supply, so we can easily find jobs elsewhere," the couple said as they held each other's hand.
Another couple, Anna and Mikhail, also had to cancel their New Year vacation to China because of the ruble's collapse.
But they believed the financial turmoil has somehow positively affected their family life.
"The crisis gives us a chance to do many things we used to postpone for years, like changing wallpapers or visiting doctors," the couple told Xinhua.
"It is also a perfect time to invest into personal growth: acquiring new skills, reading books, or studying Chinese to get better prepared for our trip."
Their optimistic view was shared by President Vladimir Putin, who has assured that the government will fulfill its obligations and the country will go through "temporary" difficulties.
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