Analytical Center experts discussed trends in consumer prices and household income in 2016

2 march 2017

“2016 saw continued decline in the household income in Russia despite a small uptake in real pay resulting from the slowing down in the consumer prices inflation,” said Leonid Grigoriev, Adviser to Head of the Analytical Center, opening a roundtable on the trends in the consumer prices and household income in 2016.” At the same time, the real income of the dependent categories of the population, including the pensioners, continued to drop, the expert pointed out.

During the roundtable Analytical Center experts also presented a new issue of the bulletin on the trends in the Russian economy titled “Household Income during Economic Recovery”.                

“In 2016 the transformation of the structure of household income picked up pace somewhat: the share of employee pay on an annualized basis fell by 0.8 percentage points from 65.6% to 64.8%, while the share of social benefits increased by 0.8 percentage points from 18.3% to 19.1%,” said Anna Lobanova, a researcher with the promising projects monitoring unit of the Department for Research Works of the Analytical Center. As for the share of income generated by entrepreneurial activity, it fell down to 7.8% in 2016. The expert puts that down to the fact that the overall level of entrepreneurial activity in the country remains low. The share of income from property fell from a high of 10% seen in 2005-2006 to a low of 5% in 2011-2012 and then began to slowly go up again, reaching 6.3% in 2016.

The bulletin pays special attention to the issues of income inequality which is having a negative impact on Russia’s economic growth, noted Victoria Pavlyushina, an advisor with the promising projects monitoring unit of the Department for Research Works of the Analytical Center. According to her, the high income inequality that we see in Russia today emerged in the 1990s and has remained practically unchanged since then. “During the 2014-2015 recession, the gap between the income of the richest strata of the population and the poorest ones, that started in 2013, picked up pace. But in Q2 and Q3 of 2016, income inequality once again began to grow,” the expert reported.

In 2012-2013 the share of the population with an income below the official poverty line in Russia fell to a minimum of 10.7-10.8%, Ms. Pavlyushina noted. But after that it shot up, reaching 13.3% in 2015. In the meantime, quarterly statistics suggest the percentage of the poor in the total population stopped growing in 2016: it reached 13.9% in the first 9 months of 2016, while the annualized figure for the first nine months of 2015 was 14.1%.