That means it's belt-tightening time in Russia.

In retaliation for Western sanctions, Russia introduced a near complete ban on Western food imports, pushing inflation higher.

Russians have seen their living standards drop as a result -- food prices have soared by as much as 30% since the start of 2014, and the central bank expects prices overall to rise between 12% and 17% this year.

The government was forced to implement deep budget cuts. In a gesture of solidarity, Putin ordered pay cuts for all members of his administration -- including himself.