Translated material
Monetarist people
Russians are ready to give up their income growth to fight inflation
The All-Russian Center for the Study of Public Opinion asked Russians how they assess inflation . Quite expectedly, the majority of respondents (74% - an absolute record for similar surveys in recent years) believe that inflation in the country this year is already “very high.” Another thing is surprising. 43% apparently believe that they themselves are partly to blame for this rise in prices. Therefore, they agree to sacrifice the growth of their incomes in favor of containing prices.The government should be pleased with such awareness. Or does this mean that we have already reached a critical level of inflation not only for the economy, but also for the population? Experts believe that people have not yet forgotten the “horrible dream” of the early 90s, when annual inflation was measured in triple digits. Therefore, we are ready, if not for everything, then for a lot, so that these times do not happen again.
This year, for the first time, the number of people who consider price increases “over the last month or two to be very high” has increased. Among participants in similar surveys in 2005 and 2006, 62% of people assessed current inflation as very high; in 2007, their number even decreased – 52%. But at the beginning of 2008 there were already 74% of them. Accordingly, the number of “moderate” optimists, for whom price increases are just as “moderate,” decreased—they became 18%. In 2007, the price increase was called “moderate” by 36%, in 2005 and 2006 - by 26%. True, in 2008 there were even 2% of people who considered inflation “insignificant”, and another 6% who found it difficult to answer.
Let us recall that this year the price increase for the first quarter, according to Rosstat, was 4.8% (forecast for the year - 9.5%), while in 2007 for the same period it was 3.4% (at the end of the year - 11.9%), in 2006 - 5% (9% per year) and in 2005 - 5.3% (10.9%).
People were also asked about the reasons they thought contributed to the rise in prices earlier this year. It was possible to choose three answers at once, but less than half took advantage of this right, and 57% found it difficult to name at least one inflation factor. Among the more meaningful answers, “inaction and irresponsibility of the authorities” comes first - only 10%. But there is another similar answer - “the government allows prices to rise” - 3%. Also close in meaning to the previous two - “lack of market regulation levers” (4%), as well as “corruption and theft” (3%), although without specifying in which area.
Several more answers can be combined into the group of “global economic reasons”: “increasing world prices for oil and other energy resources” - 9%, “declining dollar exchange rate” - 2%, “import of imported products” - 2%. People also blame the “underdeveloped economy” - 6%, and the “rising prices for gasoline” - 2%. Only 4% of respondents believe that the rise in prices could be provoked by “the greed of traders and producers, monopolization.” Even fewer - 3% - believe that the cause of inflation is the increase in wages and cash payments to the population.
Nevertheless, the majority of survey participants are willing to accept lower growth rates in their own incomes if this helps curb price increases. 43% of respondents believe that “today the fight against inflation is more important, so salaries and pensions should not be significantly increased.” 35%, however, believe that it is more important to increase incomes than to fight inflation. 22% found it difficult to answer which is more important.
Experts rightly remind that rising prices are a very significant factor not only for economic development, but also for the population. “People are tired, they have not yet forgotten the times when inflation was especially sensitive,” Igor Nikolaev, director of the strategic analysis department at FBK, told Vremya Novostei. In his opinion, the “painful” level of inflation for the population is determined not in absolute numbers, but in relation to external conditions. “There is no universal norm. In the first year when prices were released, inflation was 2500%. But 11.9% at the end of last year is high. For eight years now, price growth has been slowing down, the economy has been growing, everything has been stable,” says Mr. Nikolaev, so last year’s jump in inflation was unexpected for the population.
“The problem arises if labor productivity does not increase. In recent years, it has really started to lag behind revenue growth. But in order to bring these indicators into line, it is necessary to increase the efficiency of the economy,” Mr. Nikolaev is confident.
It is quite possible that the majority of Russians would also prefer measures other than curbing incomes, but the VTsIOM questionnaire did not offer them an alternative. Let's hope the government finds her after all.