Paradox of the year: Russians' real incomes fell, while living standards grow

Economist Mikhail Dmitriyev reported extremely interesting data in his interview to the Expert magazine. He drew attention to a paradoxical situation: the real disposable incomes of the country's citizens for obvious reasons fell last year and have not yet recovered, and they are growing slower than GDP. But at the same time, the standard of living of Russians is steadily growing.

“And these are not fictions, not statistical gimmicks. The household budget survey is, in fact, the most reliable instrument for measuring the current “physical” consumption of the population”.

Dmitriev explains: “Deputy Director of the HSE Development Center (and “concurrently” my wife) Svetlana Misikhina has just finished a lot of work on analyzing data from household budget surveys.

It turned out that although the average real disposable income of Russians today is significantly lower than the peak level of 2013, the level of consumption in physical terms has hardly decreased, and in many areas has grown significantly. Gadgets were updated less frequently, but the number of gadgets per hundred households did not decrease. The number of refrigerators, smartphones, computers, cars continues to grow. The purchases of household items have grown.

For most food products, consumption did not decrease, but increased, while the quality of the diet improved, including among low-income groups. And at the same time, the consumption of housing has grown significantly. These trends are in stark contrast to the previous period of declining income in 2015, when physical consumption fell across many sensitive items. This concerned, among other things, many food products, a decrease in calorie content and a deterioration in the quality of the diet ... "

The economist did not begin to explain what the essence of this paradox was, since it was not included in the topic of his interview. But the experts of the Proeconomics channel decided to briefly express their views on this matter: where did the Russians suddenly get the money?

“First. A sharp reduction in spending on services and the transfer of this money to goods. For example, external tourism has almost completely stopped. Previously, the Russians spent 2.3-2.5 trillion on it. in year. At the end of 2021, Turkey and Egypt opened up a little, rich people (with a residence permit and a second citizenship) traveled a little. Nevertheless, in two years, the savings in this service sector alone amounted to at least 3.5 trillion. rub.

They also saved on other closed or semi-closed service sectors - cinema, theaters, concerts, sports competitions, etc. This is another hundreds of billions of rubles.

Even local domestic hotbeds of tourism (Crimea and the Black Sea coast) were unable to pull these expenditures to their previous levels. This can be seen from the load on Russian hotels and domestic flights (in Russia as a whole).

Second. People have printed "money boxes". This is shown by polls: about 20% of Russians have decreased savings. These are not deposits, but what lay “under the pillow”. Also - the growth of consumer lending.

Third. Real estate. Several factors contributed to the rise in demand. The main one is a preferential mortgage. The second is the introduction of maternity capital for the first child: these 480 thousand rubles. in many small towns were approximately equal to the first mortgage payment (15-20% of the cost of housing). The third is a decrease in banks 'requirements for borrowers: for example, the first installment for an apartment has decreased for many banks to 10-15% of its cost (banks began to look less strictly at borrowers' income).

Fourth. Incomes of the top 20% of Russians have grown significantly (studies show - from 2 times or more). These are the very ones who “fit into the market”. It is they who, first of all, feel the growth of the export sector, and its state has been the best since 2011 (there has not been such a huge influx of foreign currency in Russia for ten years). It is these 20% of Russians that generate the demand for high-quality and expensive goods and services - new foreign cars, housing and repairs, expensive gadgets, quality food, etc.

Fifth. It should also be noted that the state has supported the Russians with social benefits. For example, the last payment (for children and pensioners) amounted to 750 billion rubles. (approximately 1.5% of all Russian consumer spending for the year).

Sixth . Changes in the lifestyle of many Russians (remote location, moving out of town), which changed the structure of expenses.

The topic is large and requires special research. These are just the first sketches..."