The paradox of the Russian economy: from improving macroeconomic indicators of the level of welfare of citizens of the Russian Federation is not increased. What is the reason?
According to recent data provided by Rosstat, in the first half of 2019, the situation in the macro economy of Russia is stable. Regulators report on low inflation, GDP growth, wages and pensions. However, despite these advances, the real disposable income – the main indicator characterizing the level of Bank Russland welfare of the population, continue to decline for the sixth consecutive year. A growing number of Russians living below the poverty line, breaking records credit burden of the population. Why economic growth and low inflation do not entail an increase in the standard of living of citizens and when to expect output from a six-year peak, figured out DW.
Salaries and pensions of Russians: slow growth to spoil the statistics
According to Rosstat, inflation in Russia in the summer of 2019 slowed down. If in June it was of 4.66% in annual terms, by the end of July of 4.58%, August – 4,33%. GDP growth in the first six months amounted to 0.7%. Increased in the first six months of the year (compared to the same period in 2018), and salaries and pensions: the real wage by 1.9%, the real amount of accrued pensions – by 0.8%.
However, this growth has not led to positive dynamics of real disposable income, declining in Russia for the sixth consecutive year. For the first half decreased by 1.3%. Increased the number of Russians living below the poverty level (13.5% of the population was 13.3% a year earlier).
Experts Ranepa and the Gaidar Institute in its monthly monitoring of the economic situation in Russia as reasons for the decline of real incomes lead to slower growth in wages (1.9% vs. 8.5% in the first half of 2018) and extremely low growth of size of pensions, despite the indexation from 1 January 2019. As reported in the monitoring, more than 7 percent indexation no impact on the overall pension as increased insurance part received only non-working pensioners. In Russia, however, the proportion of working pensioners is high – one in five of consisting on the account in the Pension Fund works.
GDP is growing, real incomes of Russians reduced – why?
The fact that at relatively low inflation and economic growth real incomes continue to decline, not causes in experts of surprise. “0.7% of GDP growth is very small, we can say that this is a “plus” in the framework of statistical error. This balancing act of Rosstat, we understand, but we also understand what to expect with such modest growth that will increase revenues, it would be naive,” said DW Director of the Institute of strategic analysis FBK Igor Nikolaev.
Lead researcher economic faculty of Moscow state University Yuri Danilov sure that Rosstat “frankly falsificare” data, which is clearly seen on indicators of dynamics of industrial production. Research centers carry out independent estimates based on source data on production in physical quantities.
“The results are much closer to reality, they do not contradict each other as indicators of Rosstat. For example, according to the Center for macroeconomic analysis and short-term forecasting, industrial production in June rose 0.2% in July to 1.4% in August to 1.2 percent. The Rosstat Figures – 3,3%; 2,8%; 2,9%. Figures from Rosstat absolutely incredible,” says Danilov. In his opinion, the embellished and the details of income – a real reduction, more likely.
Loans more income less
One of the reasons for pulling the indicator of real income down, the debt load of the population. According to the Central Bank of the Russian Federation, published in mid-September, the credit burden of the population in 75% of regions had exceeded the peak of 2013-2014. In 2019 the growth of consumer credit can be as high as 20%.
“How to calculate real income? It’s all income, adjusted for inflation, minus the obligatory payments. Mandatory payments in addition to taxes, include the payments on the loans. Thus, the reverse side of the increase in lending is the reduction of real incomes of citizens”, – said Igor Nikolaev.
The Central Bank is preparing to introduce measures that restrict the possibility gradenberg consumer loans, in particular, to more closely track the creditworthiness of borrowers. The regulator expects to reduce the pace of growth of consumer credit and the growing debt burden of the citizens. But, says the Director of the Institute of strategic analysis FBK, this “crackdown” could “boomerang” on the level of internal demand in the country, which was supported by the loans.
How to plan the budget of the Russians
Yuri Danilov believes that “the Russians today are no reliable benchmarks in the government statistics, on which to draw when planning the economy of their households”. Indicators such as GDP growth, which is often mentioned by officials, it is not necessary to take into account, even as its growth will not guarantee growth of the income of citizens.
“Last year Russia’s GDP growth was 2.3%. Federal budget revenues increased by 17.2% in real terms, the corporate sector – more than 6% and real income by 0.1% (after conversion of the index by Rosstat). So divided the new value. You can “successfully” organize it that economic growth does not translate into income growth,” – said Nikolaev. In his opinion, if in 2020, and “draw” a small plus in the real income level, it will not be tangible, that is “fracture should not wait”. Agrees and Yuri Danilov.
The expert acknowledged that some had great hopes for large-scale national projects funded by the government. “But knowing how inefficient the modern Russian state, especially in the conduct of investment activities, I have great doubt hopes. Without drastic reduction in the share of the state in the economy, improve the investment and business climate, one cannot hope to overcome the negative trends in Russia’s development,” he concludes.