Russia economy meltdown as potato prices soar by 50% and national wealth fund tanks

Russia's economy is teetering on the brink as the country's wealth fund is dwindling and simple staples like potatoes have rocketed in cost by more than 50%. President Vladimir Putin might be forced to turn his attention away from headline grabbing foreign policy moves in Iran and Ukraine and turn his attention to his country's dwindling coffers.

Business Insider reports that Russia's Finance Ministry shows the liquid assets in the nation's National Wealth Fund stood at 2.8 trillion roubles, or around £26 billion, in May. Calculations by Bloomberg show that's down 68% since the start of the Ukraine War. And for ordinary Russians, the price of a kilogram of potatoes, know locally as "second bread" because of their use as a staple, has soared from 60 rubles in January to an average of 100 rubles today.

A report from The Institute for the Study of War think tank said the dire market conditions could affect Russia's ability to continue the invasion of Ukraine.

A spokesperson said: "Continued rising oil prices following Israeli strikes against Iran may increase Russian revenue from oil sales and improve Russia's ability to sustain its war effort, but only if the price of oil remains high and if Russian oil does not come under additional international sanctions."

Russian newspaper Realnoe Vremya reports Russians are having to replace potatoes with pasta and bread because prices have become too high for most to afford.

According to the Federal State Statistics Service in January, the average price of the "second bread" was about 60 rubles per kilogram, today retail chains call 90 rubles per kilogram a "super price", while the average market price exceeds 100 rubles per kilo.

In response to the shortage of the vegetable, sowing areas for potatoes have been expanded this year in the Tatarstan region of Russia.

Dmitry Gordeyev, an expert from the V.M. Gorbatov Federal Research Centre for Food Systems, told the newspaper: "This trend can be observed across Russia and even in Belarus, where efforts to expand potato planting areas are also actively underway.

"The key issue is understanding the current shortage of potatoes and the sharp rise in prices on the domestic market.

"Primarily, this is due to the fact that in previous years, potato prices were relatively low, prompting many farmers to abandon potato cultivation in favour of more economically viable crops, thereby increasing profitability."