Upbeat pop music blares through the atrium of an upscale shopping center in a middle-class neighborhood on the outskirts of Moscow. But what was supposed to be the soundtrack to the hustle and bustle of shoppers ends up playing over largely empty glass-fronted stores with boarded-up windows — a poignant sign of Russia’s economic malaise.
The sprawling Goodzone shopping mall opened its doors in 2014 amid great fanfare. It includes an eight-screen multiplex cinema that now stands deserted, with the lobby lights turned off. Although it is still open seven days a week, the mall in southern Moscow appears to be slowly dying, with few stores open and even fewer customers.
Following its move from Ukraine, the exodus of Western companies and unprecedented Western sanctions, Russia’s economy has defied expectations, turning to massive military spending and increased spending on China and India.
However, tensions are growing, with GDP recording a contraction of 1.8% in the first two months of 2026. Russian President Vladimir Putin acknowledged the problem at a government meeting on economic affairs in mid-April.
“Statistics show that economic growth, unfortunately, has been slowing down for two consecutive months,” Putin said, demanding that authorities explain “why the trajectory of macroeconomic indicators is currently below expectations.”
Russia’s Communist Party leader Gennady Zyuganov later criticized what he described as a lack of competent answers to Putin’s questions at the government meeting, calling the situation “sad and worrying.”
Speaking in Russia’s State Duma (parliament) last week, Zyuganov warned that the country could face a Bolshevik-style revolution if the government fails to contain the weakening economy.
Although he avoided criticizing Putin — as is often the case with the opposition orchestrated and tolerated by the Kremlin — he rebuked the government.
“We have already warned them repeatedly: with this course, the economy will inevitably collapse,” Zyuganov said.
“Semi-apocalyptic” desert mall
While there are no signs of mass social unrest in Russia, and other shopping malls, including the giant Aviapark in northwest Moscow, appear to be doing well, several Goodzone employees described to CNN with concern the increasingly sparse customer flow there.
One of them was Ivan, a cashier at a branch of one of Russia’s largest retail chains, who asked CNN not to disclose his last name or where he works. This is his second job, and he can’t afford to lose it in the current situation, he said.
“Well, in terms of the economic situation, does that say anything about the situation in the country?” Ivan asked, pointing to the screen on his cash register.
The monitor shows 13 transactions made so far that day – a paltry total of 3,417 rubles (about $45). It’s a Thursday afternoon in late April, and Ivan says that in better times, the number of transactions would be closer to 300.
“(The Goodzone) feels kind of apocalyptic,” Ivan said. “The mall is so big that you can get lost and tired just walking there. It looks like it was built and designed to receive a huge flow of people, but I didn’t see anything like that.”
CNN has reached out to the mall’s management for comment. The mall’s website states that parts of the site are being renovated and that new tenants are being introduced – none of this was confirmed by CNN.
The site is advertising commercial spaces for rent at incredibly low prices, starting at just 1 ruble (about $0.01) per square meter. Many of the empty stores were previously home to Western brands that have relocated.
Two women who work at a gift shop, who again asked that their names not be used, told CNN that there are almost no more customers coming into the store.
“Basically, we’re using this store as a warehouse,” one said. She added that after the Covid-19 pandemic, many companies moved online, but business generally recovered — that is, until Russia’s full-scale invasion of Ukraine in February 2022.
“After 2022, purchasing power has decreased,” she said. “We no longer believe the situation will improve. We just hope it doesn’t get worse.”
The second woman nodded. “That is our only wish, because the prices of everything are rising daily everywhere, but wages are not increasing,” she said.
The women said that their boss was having difficulty meeting the increased tax demands. “The owner is running around like crazy because taxes went up this year, and now he’s having trouble raising the money to pay. It’s really hard for business owners right now,” said one.
“The expansion cycle is over”
To boost revenue, Russia raised income tax and corporate tax last year, with value-added tax, or VAT, rising to 22% from January 1, 2026.
Ruben Enikolopov, research professor at the Barcelona School of Economics, explains that at the start of the large-scale invasion of Ukraine, the Kremlin had low public debt and considerable reserves, and injected money into the economy through military spending.
“This works for a while, but it cannot continue forever. Public spending has helped the economy, but now the boom cycle is over. Reserves are low and they need to find money somewhere, hence the increase in taxes,” Enikolopov said.
Enikolopov said that while Moscow benefited from high energy prices during the war in the Middle East, Ukrainian attacks on the Russian supply chain — especially the ongoing attacks on refineries — have reduced the amount of oil Russia can sell.
Last month, Russia’s Economic Development Minister Maxim Reshetnikov publicly acknowledged that recent tax changes had affected businesses.
Russia has been counting on its reserves, Reshetnikov added, but “now we are seeing that these reserves are practically exhausted and that the macroeconomic situation is much more complicated.” The government’s main task is to help companies adapt to the current situation, he said.
The rich get richer, the poor get poorer
But this will not necessarily be that simple – especially due to state-imposed interruptions to the internet and mobile phone network, which have affected the capital and other large cities in recent months.
Oksana in St. Petersburg says the restrictions make it difficult for customers to communicate with the auto repair shop where she works, as well as place orders. Putin defended the restrictions as necessary for public safety.
“I’m a sales manager and I need to meet customers in person on the streets, but sometimes internet outages force me to work from home so I can access Wi-Fi,” said Oksana, who asked to use a pseudonym because she is not authorized to speak to the media. “The whole world orders online and there are days when customers are simply technically unable to place an order or buy anything.”
Despite restrictions and increased tax burdens, Russian billionaires saw an 11% increase in their combined wealth last year despite sanctions, according to Forbes Russia.
Alexandra Prokopenko, a researcher at the Carnegie Russia Eurasia Center in Berlin, told CNN: “It’s no secret: the war has increased inequality in the Russian population. We’re seeing the rich get richer and the poor get poorer.”
This is being felt acutely by residents of Golitsyno, a small town in the Moscow region where most live on low incomes. Lyubov Sergeevna – who revealed only her first name and patronymic – told CNN that they are facing skyrocketing prices due to the war.
She and her husband live off their pensions, which together amount to about 64,000 rubles a month (approximately $854). She feels grateful that she is not a widow. “Together, we can manage. If I were alone, the apartment rent would be 8,200 rubles… It’s harder when you’re alone,” she said.
“I am pessimistic about prices,” she added, believing they will likely continue to rise until the end of the war.
But even in the face of difficulties, she continues to express support for what Russia calls a “special military operation”, stating: “We will resist for a good cause; there is nothing more to do.”
