The euphoria of the World Cup has increased the appetite of Russia's beer in the UK. For the Russians comes the big hangover: the tax increases, the higher retirement age and the more expensive state services

yesterday, 00:07

Author:

Bogdan Cojocaru

♦ The Russian government decided to increase VAT from 18% to 20% by 1 January 2019 ♦ To increase the age of retirement from 60 to 65 years for men from 2019 to 2028 and to 55 to 63 years for women until 2034 ♦ The issuance of a passport to Russia costs 70 euros. A driver's license costs more than 40 euros.

The celebratory atmosphere of the Russian football championship has brought additional sales, especially of beer, to retailers in all states who have a particular passion for football. The Russian market was no exception, and the increase in consumption adds more energy to a consumer-dependent economy and oil prices.

But for ordinary Russians, the euphoria of football becomes a hangover. Higher taxes, lower pensions and government attempts to increase the retirement age give headaches. Russian citizens are paying for the privilege of hosting the World Cup, the biggest sporting event in the world, with deep cuts in benefits.

In Russia, "daytime sales are four times higher than in a typical night" says Bloomberg, Doug Steele, a Canadian who owns a bar in Moscow on Nikolskaia Street, has become the unofficial center of fan parties of football. "It's total chaos."

Customer traffic increased by 45-63% in Perekrestok supermarkets in host cities during the first two weeks of the football event Sales of snacks, soft drinks and, of course, beer sales have increased significantly, according to X5 Retail Group, Russia's largest retailer, Magnit PJSC, the second largest retailer, and Lenta, one of the largest retailers in the world. other chain stores, reported similar results.Since the beginning of the World Cup, sales of Rosinter restaurants have increased on average by 30%. "Foreign visitors are usually 10-15% of customers in our Moscow restaurants and Healthy t Petersburg. Petersburg, but during the matches, and especially after the matches, the share is 90%, "said Sergey Zaytsev, president of the company.

Consumer demand is the main driver of Russian economic growth, but the pace of retail sales is lower than before the recession. The average increase was 2.5% in the first five months of this year and probably accelerated to 2.5% in June, at an annualized rate, according to a Bloomberg survey.

The remarkable course of the Russian national team and the publicity made the world championship makes that the Russians are interested in football to eclipse everything that is happening lately, and worried even of a radical reform of pensions. That's what the Levada Center says, an independent opinion poll of Russia, writes Deutsche Welle. Even the defeat of the national team in the quarterfinals by Croatia, kicking 11 meters, did not disappoint the enthusiasm of Russian fans. They are euphoric and grateful to the team, which seems to have given everything on the ground. But the World Cup ends on July 15th. Foreign fans will return home, and the Russians will return to the economic reality. Nobody expects a dynamic growth of the Russian economy this year. The Ministry of the Economy has reduced its GDP growth forecast for 2018 from 2.2% to 1.9%. And the advance will further slow down in 2019, to 1.4%, according to official estimates. One of the obvious reasons for this negative trend is the government's decision to increase VAT from 18% to 20% on 1 January 2019. Parliament adopts the proposal. The Ministry of Economy is aware that rising taxes will dampen economic growth and accelerate inflation. The situation is aggravated by the stagnation of wages over the past four years. But the increase in VAT will bring the equivalent of nearly 8.4 billion euros to the budget next year

The amount is comparable to the costs of accommodation of world Cup. The championship cost 9.2 billion euros to Russia, according to official statistics.

The reform does not end with taxes. While the fans were thrilled by the match of the national team, their government announced a new burden for Russian citizens: to raise the retirement age of 60 to 65 for men from 2019 to 2028 and 55 to 63 years for women In 2034, a supporter of the regime, Alexei Kudin, head of the Accounts Chamber, believes that raising the retirement age will increase state revenue of 100 billion rubles (1.4 billion euros) per year between 2019 and 2024. Maxim Topilin promised that part of this money will be used to increase pensions.

The reforms were not greeted with enthusiasm by the Russians, and the consequence is that the popularity of President Vladimir Putin has declined considerably. That is why, according to some observers, the likelihood of a reduction of the reform is high

The Russians already pay more for other services, including for documents issued by the government. Before the price increases, issuing a passport costs around 50 euros. Now it costs 70 euros. A driver's license costs more than 40 euros, against less than 30 euros before. In addition, on average, prices charged by former state-owned enterprises will increase by 4%

On the other side of Europe, in June, British buyers are spending more on large-screen TVs, steaks and beers, the ingredients a perfect view. But overall sales growth has slowed, reports Reuters. British consumers are cautious about Brexit. Consumer spending accounts for about 80% of the UK economy, the second largest in the EU. According to the will of the consumer to spend, the central bank of the United Kingdom directs its monetary policy