The authors of a new bulletin on the current trends in the Russian economy titled "Trends in Household Income" note that the continued contraction in real disposable household income is now officially the longest in Russia's recent history. In 2018 real disposable household income shrank for the fifth year in a a row, in total over the past 5 years it has declined by 10.8%.
The experts note that even though the first six months of 2018 saw real wages in Russia increase at a fast rate as a result of record low inflation, increase in the salaries of government employees and the minimal wage, all factors that helped drive up real disposable household income, as inflation picked up pace in the second half of the year, real household income growth ended up being negative on an annualized basis.
The analysts believe that a negative contribution to the trend in real disposable household income was also made by the decline in revenue from property and specifically lower rates on bank deposits. In 2018 the share of wages and salaries in household income increased even as the share of other sources of income decreased, specifically entrepreneurial revenue, social benefits and income from property were in decline. According to the Federal Statistics Service, in 2018 the wage share in household income increased by 0.8 percentage points on 2017, going up from 65.4% to 66.2%.
A rise in positive assessments of the standard of living in the first six months of 2018 resulted from an increase in real disposable income following the implementation of the President's May decrees and the fact that in recent years most people have switched to cheaper goods and services. The second half of 2018 saw the assessments of the standard of living deteriorate.
For details, see the bulletin "Trends in Household Income"
For other bulletins on the current trends in the Russian economy, see Publications.