It is also likely that many Russians find it difficult to pay higher prices. Yes, it is a breach of the social contract people had with Putin, in the same way that China’s economic crash leads to Xi’s breach of the Mandate of Heaven.
“It is also likely that many Russians find it difficult to pay higher prices.”
Food price inflation has been high, as has been energy. Regular people not involved in business across borders, are stuck with interest rates around 20% or higher in the ruble economy, and must pay higher prices for imported goods (very little that is nice in Russia, is made in Russia).
Unemployment has been low, and wages have risen quickly during the war, but that benefits a proportion of working people, whereas inflation hits everyone.
I have not seen good data (and honest data, like honest anything, is hard to come by in Putin’s Russia), on the net effect of higher wages and higher prices. Clearly, wage increases have mitigated the fall in the overall standard of living, with some people feeling better off.
To pay for the war and sanctions costs, the Russian Government has spread it around, reducing some other spending, raising some taxes, cashing out some reserves, taking on some more debt, and printing more rubles pretty aggressively (expanding M2 like 20-25% per year).
They were careful not to pull the financial rug out from under their population suddenly, but they have been doing it incrementally. The cost to the population, in terms of standard of living, is accumulating. Taxes are going up, inflation is going up faster, subsidies (like for gas) are being withdrawn, the currency is weakening (markedly in non-official “street” exchange rate), and interest rates are high. Not only are these bites out of the general standard of living accumulating, but they also face the prospect of accelerating, as limits to some forms of mitigation are reached (like reserves running low), and inflation risks accelerating on its own, as inflationary expectations become cemented.
They have been able to kick the van down the road to a significant degree in the short term, but the bills have accumulated. Russia is significantly more brittle to withstanding future economic shocks than it was in 2021, and the International sanctions regime is now institutionalized to roll out new economic shocks every few months.