The current recovery is just compensation for last year’s losses
A STEP FORWARD AND TWO BACK
An interesting forecast was voiced by the First Deputy Prime Minister at the Council on National Projects with Vladimir Putin , which was held this week.
“In terms of the dynamics of real disposable income, we are still reaching the planned figure of about 3%,” Belousov told the President. Thus, he confirmed the calculations of the Ministry of Economic Development – the same forecast for the growth of real incomes of Russians for 2021 was given by the department in April. After that, there was a third wave of coronavirus, but the government remains optimistic.
Real disposable income of the population is cash income minus mandatory payments (utilities, taxes, etc.), adjusted for inflation. Roughly speaking, if a person’s salary increased by 7%, but taxes increased by 4%, and prices in stores – by 6%, then real disposable income fell by 3%.
This has been happening in Russia for the past six years. If from 2000 to 2013 the real incomes of Russians grew steadily, then from 2014 the schedule began to jump according to the principle of “one step forward and two back” (for more details, see “Figures only”). As a result, our real disposable income today is 10.2% lower than in 2013. Rosstat named the reasons for their fall: inflation and an increase in mandatory payments, including payments on loans and taxes.
MUCH DEPENDS ON COVID
And now, in the middle of the second year of the pandemic, the government pleases us with a positive outlook. How real is it? Moreover, in the first quarter of 2021, according to the same Rosstat, the real incomes of Russians fell by 3.6%. Will the negative trend be reversed?
- Rosstat data on real disposable income for the second quarter has not yet been published. But according to my estimates, in the second quarter of 2021 , this figure should have increased by 6-8 percent. And this is a completely understandable and natural tendency. Because the data is compared with the second quarter of last year – the epicenter of the coronavirus attack on the economy. It was then that uncertainty began, lockdowns, self-isolation began, many people lost their jobs, and the state aid mechanism had not yet started working. Therefore, this year will compensate for what collapsed in the second quarter of 2020. And the growth of real incomes by 3% at the end of the year is a very real figure, – says Georgy Ostapkovich, Director of the Center for Business Studies at the Higher School of Economics. – But if we take data for two full years, then the growth will be zero, because in 2020 real incomes fell by the same 3%. So this growth is a recovery one: we’ll just beat back the losses of 2020.
There are other reasons that accelerate the growth of real incomes of the population – again, compared to the disastrous last year.
- In Russia, unemployment began to decline: if at its peak (in August last year – Ed.) It reached 6.4%, now it has dropped to 4.9%. Accordingly, many people who had no income a year ago began to receive a salary. The mechanism of state support for the population has also started working: this is assistance to families with children, and the preservation of jobs, and other measures. In addition, the economy began to grow. According to the results of the second quarter, all the main sectors came out in plus: industry, construction, transport, agriculture, – says Georgy Ostapkovich.
True, there is one “but”: much depends on how the covid will behave.
- If, God forbid, new lockdowns, an increase in unemployment begin, then we may not achieve an increase of 3%, – the expert warns.
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