At his compact stall in Lviv’s main outdoor food market, Ihor Korpii arranged jars of blueberries that he and his wife had picked from a nearby forest into an attractive display. Fragrant dill and fresh peas harvested from their garden lay in neat piles on a table.
A schoolteacher surviving on modest pay, Korpii peddles produce during summers to supplement his family’s income. But this year, he has had to raise prices by over 10 per cent to make up for a surge in fuel and fertiliser costs brought on by Russia’s invasion. Now, buyers are scarce, and sales have slumped by more than half.
“War has driven up the cost of almost everything, and people are buying much, much less,” said Korpii, pointing with weather-beaten hands to a heap of unsold carrots. “Everyone, including us, is tightening their belts. They’re trying to save money because they don’t know what the future will bring.”
Since Russia attacked Ukraine, food, energy and commodity prices have climbed around the world, worsening global inflation and inflicting financial hardship on millions of vulnerable people.
Few countries are feeling the bite as much as Ukraine, where Russia’s deadly campaign of attrition is piling economic havoc atop a devastating humanitarian toll.
Prices here have jumped more than 21 per cent from a year ago, one of the highest rates on the continent, as Russian attacks on critical infrastructure and Russian occupation of major industrial and agriculture-producing regions in the southeast sow chaos in supply chains. Fuel prices are up 90 per cent from a year ago, while food costs have surged over 35 per cent, according to the National Bank of Ukraine.
The economy is expected to contract by over one-third this year, and the government has warned it faces a fiscal shortfall of over $5 billion a month because of the war. Ukraine narrowly avoided a sovereign debt default last week.
Although international institutions have provided nearly $13 billion in financing for Ukraine, the support is only going so far: The central bank has devalued the hryvnia, the country’s currency, by 25 per cent against the US dollar to head off a financial crisis — a move that will make many goods even more costly.
That is hardly welcome news for businesses such as CSAD-Yavoriv, a family-run trucking company that transports commercial goods, as well as vital grain and humanitarian supplies, in Ukraine and across European borders.
Trucks have become critical for transport after Russia blocked Ukrainian ports and bombed train tracks. The price of fuel has tripled since the invasion in February, in part because Russia also destroyed numerous Ukrainian fuel depots, said Marichka Ustymenko, the company’s deputy director.
Not everyone is hard-hit. At The Citadel, an upscale hilltop hotel in Lviv, the parking lot was filled with Mercedes-Benzes and other luxury cars owned by wealthy Ukrainians on a recent day. People working in the country’s thriving tech sector also have abundant work.
But for older people with fixed pensions and millions of Ukrainians who have been displaced or whose salaries or jobs have been cut, finances are being squeezed.
Lviv, a Unesco world heritage site that was a major draw for tourists before the war, has been spared heavy Russian attacks, attracting a flood of internally displaced Ukrainians.
Rents have shot up in cities considered to be safe, while the price of furniture and electronics has jumped as Ukrainians who fled the country start to return.
The war has most noticeably pushed up food prices. A so-called Borscht index, which measures the cost of ingredients used to make Ukraine’s national dish, was up 43 per cent in June from a year ago. Russian occupation of rich agricultural regions has delayed harvests of beets — the key ingredient in borscht — and other vegetables, nearly tripling the cost of some produce.
Back at the outdoor food market, butchers stood behind refrigerated cases heaped with meat, waiting for customers. Prices for beef, pork, chicken and dairy, sourced from farms in western Ukraine that have remained largely untouched by Russian strikes, had risen only modestly. Even so, business was slow.
“Prices for these products aren’t higher, but people are cutting back sharply,” said Lesia, a meat seller at the market for 20 years, who, like many older Ukrainians, was reluctant to give her full name for fear of drawing attention. “Still, we can’t give up. After all the things Russia’s done to us, we will never give up.” -- New York Times
Liz Alderman
The writer is the Paris-based chief European business correspondent for NYT
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