Financial Times FT.com

The economy: The trouble with reliance on oil and gas

By Stefan Wagstyl

Published: April 17 2008 14:41 | Last updated: April 17 2008 14:41

It is morning in Moscow’s Danilovsky food market and the shoppers are mostly pensioners making their purchases before working people surround the stalls later in the day. There is no lack of quality in the piles of fresh produce, ranging from Azerbaijani tomatoes and Turkish oranges to slabs of newly-churned white cheese from farms around Moscow. But the elderly shoppers are cautious – prices are rising much faster than their meagre pensions. “I can barely afford to feed myself,” says 81-year-old Maria Kuznetsova. “I hardly ever buy meat any more. Everything costs so much more than last year.”

The evidence is everywhere. Shoppers say that, for example, milk, which cost Rbs40 ($2) a litre in December, is now Rbs65; flour is up from Rbs30 for two kilos to Rbs50 and 10 eggs have risen from Rbs27 to Rbs40.

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