MOSCOW— Capital flight, the fall in oil prices and Western sanctions are pushing Russia's staggering economy into recession. But not all business in the country is suffering.
The Russian ruble's sharp drop in value benefits exporters by lowering costs at home. Those who import, like Swedish retail giant IKEA, are suffering higher costs. IKEA imports about 40 percent of what it sells in Russia and is considering raising prices to make up for the loss.
But businesses that focus on frugal customers, like High Level Hostel, are doing well. As part owner Roman Drozdenko said, "It is only natural that businesspeople now, when businesses are trying to cut expenses, are moving on to hostels."
Drozdenko said the hostel’s unlikely location — on the 43rd floor of the Moscow International Business Center, known as "Moscow City" — was only possible because of the lack of interested tenants.
" 'Moscow City' is only 30 percent full. There are a lot of empty spaces here. So, I think that is what ... allowed us to come here."
Despite investment fleeing Russia, and a glut of office space, construction of new skyscrapers continues.
Russian authorities are putting their best spin on the economic tumble, saying sanctions, including their own ban on Western food imports, will spur domestic industries.
The economic gloom did not stop the opening of the world's largest artificial ice-skating rink last month in Moscow.
"In fact, a lot of Muscovites will not travel abroad during the coming New Year holidays, and some will visit the skating rink. That means the Russian money will remain in Russia," said Irina Gordina-Nevzhmetskaya, deputy general director of the All-Russia Exhibition Center.
The sinking ruble means international travel is more expensive for Russians. Now that a recession is expected, many are beginning to worry about the economy and just how much further it will slide.