Russia Faces Over 10% Hike in Retail Food Prices in 2015

Russian Deputy Prime Minister Arkady Dvorkovich predicts that food prices in Russia will soar further and increase by more than 10 percent next year. They have been on the rise since Moscow imposed an embargo on Western countries in August in response to sanctions.

MOSCOW, December 25 (Sputnik) — Food prices in Russian groceries and supermarkets could increase by more than 10 percent in 2015, Deputy Prime Minister Arkady Dvorkovich said on Thursday.

"I think that food prices in Russia will rise more than 10 percent next year," Dvorkovich said in an interview with Rossiya-24 television.

Food prices in Russia have been on the rise since Moscow responded to Western sanctions over Ukraine by slapping the United States, the European Union and several other countries with a year-long embargo on a variety of food imports in August.

Soaring food prices are helping to drive rampant inflation in the country even higher, hitting 10.4 percent since the start of the year, the Federal Statistics Service (Rosstat) reported on Wednesday.

The Kremlin's economic aide and former economy minister Andrei Belousov said on Thursday that annual inflation could reach around 11 percent by the end of 2014.

The import ban has put a strain on a number of EU economies as well, mostly affecting countries such as Poland, Finland, Norway and the Baltic states, with the entire logistic sector suffering as a consequence, the United Nations Department of Economic and Social Affairs said in a report published earlier in December.

According to the report, Russia's measures have put pressure on national budgets to compensate farmers' losses, and while EU members could file compensation claims within the union, the losses are unlikely to be recovered in full.