Russian economy: GDP is growing, population is getting poorer

Why Russia’s Young People Want Out

Russian economy: GDP is growing, population is getting poorer

Experts – on the contrast between the optimism of official statistics and the real economic hardships of the Russian population

On January 1, Russia entered into force a law on the collection of 13% tax on income from deposits or investments in excess of 1 million rubles (about 15 thousand dollars).

This led to a significant outflow of household deposits. But, as President Vladimir Putin promised earlier, the funds received as a result will be directed to measures of social support, including for families with children..

According to a survey by the Public Opinion Foundation, almost every third citizen of the Russian Federation (33%) said that they live in poverty. Moreover, 7% of them admitted that they had always lived like this, and 12% – that they became poor more than ten years ago. Among the main reasons for their poverty, Russians named the low level of wages and their decline, the growth of all kinds of tariffs, including housing and communal services, and unemployment..

Meanwhile, the Russian authorities are generally optimistic about the economic results of the past year. This, in particular, was emphasized by Vladimir Putin, speaking at the traditional “big” press conference.

According to Bloomberg forecast, Russia’s economic growth will be about 3%.

And according to experts from the World Economic Forum (WEF), the Russian Federation ranks 28-29th in the rating of readiness for post-crisis development. In this sense, it looks a little more preferable than, say, India and a number of European countries, but significantly inferior to the G7 countries (USA, Canada, Great Britain, France, Germany, Italy, Japan) and China.

Andrey Nechaev: “The number of the poor has grown in leaps and bounds, the number of the unemployed has visibly increased”

Former Minister of Economy of Russia Andrei Nechaev believes that 2020 was a very difficult year from an economic point of view for the country and, of course, a crisis. According to him, on the one hand, this was the result of stagnation, which has been going on since about 2015, and on the other, very serious losses in export earnings and the budget..

“Thus, the situation was aggravated, which ultimately led to a fairly visible devaluation of the ruble – by almost 20 percent, with a corresponding inflationary shock,” he added in a commentary for the Russian service of the Voice of America. – And, of course, pandemic restrictions made their negative contribution. There are no final data for the year yet. But the drop in GDP and other macroeconomic indicators will be quite serious. Independent experts speak of at least 5%, although official estimates are slightly lower (about 4%) “.

But the most important thing is that there has been a sharp drop in living standards, says Andrei Nechaev: “Even according to official data, the real incomes of citizens have decreased by about 5%. The number of the poor has grown in leaps and bounds, and the number of unemployed has visibly increased. All this together, of course, along with pandemic fears, creates serious social tension in society. What is even more depressing – I, for example, do not see factors that would allow us to say that we will get out of this quagmire in the near future ”.

In terms of falling living standards, the most negative role was played by the so-called counter-sanctions, the economist is convinced: “Thanks to them, the supply on the market has artificially shrunk, this has contributed to the fact that the geography of imports has changed, while imports in general have shrunk, but not as much as hoped the government of the Russian Federation within the framework of the import substitution program. As a result, the quality of food deteriorated, and given the low competition, there was a serious jump in prices. In general, counter-sanctions dealt a blow to ordinary people “.

At the same time, consumer demand has dramatically shrunk and continues to shrink, and investment activity in the country remains extremely low, the ex-Minister of Economy of Russia points out. “There is simply no money in the budget for state investments in the required amounts to finance all kinds of mega-projects that were previously staked on. Exports, including hydrocarbons, are actually falling or stagnating. Therefore, I am afraid that this situation will continue for at least many more months, “summed up Andrey Nechaev..

Igor Nikolaev: “We have a complete failure in terms of the dynamics of the income of citizens”

In turn, the director of the FBK Institute for Strategic Analysis, professor at the Higher School of Economics, Igor Nikolaev, assures that the main negative event of the year was the coronavirus, which had a strong impact on the Russian economy. In his opinion, the consequences of this factor will affect in the future..

“However, from the point of view of purely formal results, Russia seems to look pretty good,” he says. – According to the official forecast of the Ministry of Economic Development, GDP is expected to decline by less than 4%, which is much better than in developed countries, including the United States. But this, I repeat, is a formal approach. “.

And if we honestly understand the reasons for the status quo, we must conclude that the structural features of our economy played a key role here, Igor Nikolaev believes: “In Russia, those areas that have suffered the most are much less developed, especially during the period of severe quarantine restrictions. These are tourism, catering, hotels and the entire sector of business services. For example, the share of business services as a type of economic activity in our country on the eve of the second quarter amounted to only 6.2% of the gross value added. And in France – 16%, in the UK – 15.9%. Moreover, this share in Russia fell by about 10%, and in the UK and France – by more than 20% “.

In a word, at the initial stage of the current crisis, structural features have become an advantage of the Russian economy, the professor continued the analysis. However, further, in his opinion, what seemed to be a competitive advantage may turn into a significant disadvantage, and precisely on the trajectory of overcoming the crisis. “Because the fastest, of course, will start to recover the most affected industries, and to a large extent this will be based on consumer demand,” he explained. – Consumer demand in the West will grow much more actively. Because in many developed countries, the real incomes of the population during the crisis did not fall, but even increased. In Russia, they fell a lot “.

According to the results of the year, the real incomes of the population of the Russian Federation will fall by 4-5%, Igor Nikolaev predicted. According to him, the Russians have already entered the crisis with seriously emaciated wallets, and the pandemic has aggravated everything: “Only registered unemployment in our country has grown more than 5 times. In addition, the clearly insufficient support of the population and business from the state affected. As a result, we have a complete failure in terms of the dynamics of citizens’ incomes “.

Thus, according to official statistics, Russia looks good, but this fact warms the citizens a little, the professor concluded..

  • Victor Vladimirov

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