Real incomes of Russians back on eight years in the past

Photo: Alexander Demyanchuk / Reuters

The decline in real incomes in Russia have driven them back to the level of 2009, assessed the web. Revenues to decline 29 of the last 30 months, but the government still look forward to their growth by year-end 2017

A massive decline in real disposable income in April 2017 by April of last year, which reported the state statistics service, has led to the fact that they dropped to 2009 levels, according to the fresh survey, Vnesheconombank (VEB) on the operational assessment of GDP.

“Consumer spending, which was the main driver of GDP in the first quarter, in April declined slightly. Mainly due to the decline in demand for paid services. It was the decline in real wages and a significant reduction in income. In real terms incomes have fallen to a record low for this crisis of values, reaching levels in 2009” — presented in the review of the words of the chief economist VEB Andrei Klepach.

The basis for the calculation of real incomes fall Rosstat data on monthly nominal income of the population (in April, they amounted to 30.5 thousand rubles per capita), and the EBV makes the adjustment for inflation and seasonality, said RBC klepac. “Seasonally adjusted data show that real earnings in April fell to an average level for 2009,” he says.

Real incomes of citizens “began to increase”, said on 14 may, the President Vladimir Putin. In April, according to Rosstat, grew by 2% in comparison with March, however, the data VEB are more pessimistic — they show the reduction in real income by 4.9% month-on-month, adjusted for seasonality.

“The scale of the decline in revenues in April rather sharp, especially against the more stable dynamics of wages and salaries,” — said Klepach. According to VEB, the real wages month-on-month increased steadily from November of last year, but in April declined by 0.6%. “With high probability it can be assumed that other or business income is likely undervalued and a more complete picture can be seen only at the end of the year,” Klepach added.

Compared to April of last year, real income in April fell 7.6%, according to Rosstat. In the methodology of services revenues consist of salaries, social payments and other income, including the business, minus taxes and other mandatory payments. To the April data have questions, says economist “VTB the Capital” in Russia and the CIS Alexander Isakov. Real wages, which in the structure of incomes, occupy more than 60%, in April were up 2.5%, and welfare payments, whose weight is 18-19%, presumably, has not changed owing to the February index, he says. With this in mind, other income would have to fall about 40% is unrealistic, surprised Isakov. Most likely, Rosstat these data will reconsider, he said.

From October 2014, real incomes have shown a positive trend year-to-year only once — in January of 2017, when they grew by 8%. However, the greatest contribution to this was made a lump sum payment to pensioners in the amount of 5 thousand rubles While the revenue growth has been and without it, it would be much lower — just 1%, said Minister of economic development Maxim Oreshkin. The maximum drop in income was recorded in August last year — according to specified data of Rosstat, it was 10%.

The authorities hope that the real income at the end of 2017 will increase. In the underlying macroeconomic forecast of Ministry of economic development, based on which is calculated the budget growth of 1%, and the same in the target scenario, which the Agency considers major (this forecast includes some measures to accelerate the pace of economic growth, however, the Ministry did not disclose what measures it considers).

The Ministry of economic development is not the direct target for real income growth, says chief economist of “Renaissance Capital” in Russia and the CIS Oleg Kuzmin. To help out in a small plus may stop the reduction of income from entrepreneurial activities, payroll and social payments, he adds. The main components of real income for the year will be positive, due to which incomes in General will rise, even if other incomes are stagnating, I’m sure the Isakov.

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