The bleakest scenario hasn’t materialized in large part because Russia contained the spread of financial contagion with stiff capital controls while plentiful petrodollars helped the ruble recoup losses and put a leash on inflation. Still, the worst may be yet to come: Bloomberg Economics expects an annual decline in GDP of almost 10% this year.

Weeks after the initial shock of the ruble’s collapse, runaway prices and the departure of hundreds of foreign companies, what awaits the consumer may be a long period of muddling through.

“Our lifestyle hasn’t changed much,” said Olga, an advertising manager and mother of two in the far east city of Khabarovsk.

Fears of scarcity initially prompted the 36-year-old to stock up for a month by buying grains, tinned meat and pasta. Prices for some cleaning products tripled, so she switched to a cheaper alternative.

The family put off plans to buy a second car or go on a vacation this year. But a new normal has set it, and so far it’s manageable, said Olga, asking to be identified only by first name to speak candidly about her situation.

“Not enough time has passed yet,” she said. “I think we will feel the impact later.”

What Bloomberg Economics Says…

“Russian households are already suffering from a loss of purchasing power as prices soar. The economic stress is likely to deepen as sanctions ripple through supply chains to weigh further on the labor market, compounding the effects on real incomes.”

–Scott Johnson. Russia economist

In March, the first full month since the invasion, retail sales fell an estimated 10% from a year earlier, according to Goldman Sachs Group Inc., half the decline Russia experienced at the height of the coronavirus pandemic, when lockdowns closed many stores and kept consumers at home.

As the weeks tick by, evidence points toward the resilience of households. Independent pollster Levada Center said its index of social expectations, a measure of their outlook, rose sharply last month from February.

The government’s intensified censorship and propaganda during the war are doing their part. Still, short-term inflation data and changing shopping preferences show how the sentiment is turning around.

On a weekly basis, consumer prices are now growing at nearly one-quarter their pace a month earlier. Fears of empty shelves are fading, putting an end to hoarding and panic buying.

Deposits are meanwhile flowing back into the banking system, providing the central bank with enough confidence to start lowering interest rates already after an emergency hike following the invasion.

Cards issued in Russia by Visa Inc. and Mastercard Inc. no longer work outside the country but people have seen few disruptions at home thanks to a domestic alternative pushed in the wake of the first waves of sanctions in 2014. Franchise agreements by fast food chains like McDonald’s mean some of their outlets are keeping doors open.

“All in, it appears that the economic contraction so far has been less drastic than initially anticipated,” JPMorgan economists including Yarkin Cebeci said in a report. “Economic inertia apparently prevented a sharper decline.”

For many, however, the hardships are only just beginning. Moscow Mayor Sergei Sobyanin said about 200,000 jobs are at risk in the Russian capital alone because of the exit or halt to operations by foreign businesses.

While Putin bragged Monday that the West’s “economic blitzkrieg” had failed, central bank Governor Elvira Nabiullina warned the same day that as inventories of imported products run out, the economy faces a “structural transformation” over the next six months that will trigger price spikes on some goods as producers seek new sources for components cut off by sanctions.

JPMorgan said the strength of the economy so far doesn’t mean it will avoid a full-year contraction of 7% this year, comparable to the deepest downturns Russia experienced in the last 30 years.

On Tuesday, the International Monetary Fund said Russia’s output may shrink 8.5% this year, a massive revision it attributed to sanctions and a loss of confidence in the country.

“The outlook remains bleak,” the IMF said about Russia in an update to its World Economic Outlook. “Moreover, financial disintermediation and a loss of investor confidence will lead to a significant drop in private investment and consumption, only partly offset by fiscal spending.”

Consumers, whose spending accounts for more than half of economic activity, aren’t rejoicing yet either. Fully 85% of Russians say they’ve stockpiled food supplies, a bigger share than even in 1992, the year after the Soviet collapse, according to survey published this month by state pollster VTsIOM.

Demand for gardening tools is surging as some people look to growing vegetables and home canning to survive hard times.

“Most of the population is getting accustomed to the situation,” said Andrei Milekhin, president of Romir, an independent research center in Moscow.