As the economy crumbled and sky-high inflation decimated living standards, one enterprising Russian turned to moonlighting as a taxi driver to pay the bills.

“We lived like everyone but sometimes I had to earn extra money,” he said a few years ago, reflecting on the severe economic difficulties that followed the Soviet Union’s collapse in the early 1990s.

“It’s not pleasant to speak about honestly, but unfortunately that is what happened.”

The moonlighting cab driver lamenting the pain from Russia’s 1990s slump, and years of economic mismanagement, was Vladimir Putin. Today, the president is the one inflicting such economic pain on ordinary citizens.

The current scale of the economic suffering facing Russian households harks back to the dark days following the Soviet Union’s fall.

A 20pc plunge in GDP and soaring inflation are being predicted after another collapse in Russian assets on Monday – which followed a weekend of panicked citizens rushing to the cash machine. People took out close to one trillion roubles (£7.6bn) over the weekend, according to the Institute of International Finance, while thousands of Russians were arrested for protesting against the war.

“The impact on the Russian economy will be severe, most likely resulting in substantially higher costs of living,” says Peter Schaffrik at RBC Capital Markets.

For ordinary Russians, the fallout of Western sanctions will affect holidays, football matches and even the Eurovision song contest. But what will prove most dangerous for Putin’s hold on power is a living standards plunge and an economy buckling under the weight of sanctions.

Professor Gulnaz Sharafutdinova, an expert at King’s College London’s Russia Institute, warns Putin will fear a coup d’etat as troubles on the battlefield spreads to the streets of Russia.

“His position is under threat and he does realise that, and he puts a lot of resources and thinking into protecting himself personally,” she says. “With the hit that we are observing on society and on the economy, the elites might split and there might be [some] conspiracy against him.”

The Kremlin’s warning of a shifting “economic reality” on Monday, following a weekend of escalating sanctions, is very different to the vision presented by Putin two decades ago.

On becoming president, he promised to raise living standards which he predicted could catch up to the level of Portugal.

While the economy enjoyed some growth in the run-up to the financial crisis, Russia has largely stagnated in the last decade, particularly since the annexation of Crimea and oil price crash in 2014. 

The country’s living standards still lag well behind Portugal’s, and economists expect the chasm with the West to grow even larger.