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Bloomberg Predicts a Reduction in the Income of Russians to the Level of 2006
May 14, 2020 17:58


Bloomberg predicted a reduction in the income of Russians to the level of 2006. 

The real disposable income of Russians in this quarter may fall to the level of 2006,
Bloomberg economists believe.  This quarter, the real disposable income of Russians will decline to a level “unprecedented since 2006,” they write.

According to Bloomberg Economics analyst Scott Johnson, incomes in Russia have just begun to recover from the past crisis. “Without more generous support, households will experience the brunt of the pandemic shock, and this will mean another painfully slow recovery,” the expert said.

Bloomberg notes that the National Wealth Fund has $ 165 billion. However, authorities are reluctant to spend money from reserves to support the economy for fear of further deterioration after the collapse of global oil demand, the agency said.
According to Dmitry Dolgin, chief economist at ING, the total state support in Russia is still only 3-4% of gross domestic product - this is less than in other countries. The expert called the situation with the incomes of Russians “rather terrible”.

Nowhere to fall

In the first month of the “non-working period” and self-isolation in Russia, nearly a quarter of Russians had to go into savings to pay for running expenses, a survey conducted by order of the Central Bank showed. 5% of Russians participating in this survey “ate” all their savings in just two weeks. Only 24% of those surveyed have a financial “airbag” for three months, while 47% have  unpaid credits.

At the same time, more than half of Russians felt a decline in income due to the crisis and the need to save money, the Center for Strategic Research said on May 12. The most vulnerable were entrepreneurs and employees receiving gray salaries. A survey of the Central Bank also revealed a deterioration in the financial situation of Russians. Some respondents said that they began to save, including savings on food.

After May 11, when President Vladimir Putin announced new measures to support families with children, the government services portal could not stand the load and worked intermittently for two days while the Russians massively tried to fill out applications for payments.

Rising poverty affects Putin’s popularity, Bloomberg notes. Last week, the Levada Center presented the results of a study according to which the approval rating of the President of Russia in April fell to a minimum of 20 years.

According to the April forecast of the International Monetary Fund, the Russian economy will decline by 5.5% in 2020 after growth of 1.3% in 2019.

Author: Anna Dorozhkina

Tags: Russian society Russian economy coronavirus   

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