Rosstat reported an increase in incomes of Russians for the first time in four quarters

The latest quarterly reports from Rosstat showed a rapid increase in real disposable income of Russians, by 6.8% in the second quarter of 2021. This eventwas predictable - it was from the second quarter that the low base effect came into play: after all, the numbers are now being compared with the collapse of the pandemic second quarter of 2020. In reality, Rosstat’s figures mean that Russians’ incomes are recovering quickly, but have still not reached the 2019 level.

Real disposable income of Russians (what remains after paying mandatory contributions and payments adjusted for inflation) grew by 6.8% year-on-year in the second quarter, Rosstat reported today. This is a record since at least the beginning of 2014. For the entire first half of the year, growth was 1.7%.

Rosstat revised the decline in real disposable income in 2020 to 2.8% (previously 3%).

• Rosstat does not hide that the sharp increase in the indicator in the second quarter is mainly due to the effect of the low base of last year: the second quarter of 2020 became the lowest point of the coronavirus decline in income. Initially, Rosstat estimated the then collapse in income at 8%, but since then the agency has recalculated this figure no less than four times, and now it is already 7.1%.
• If we use this figure, then the incomes of Russians in the second quarter of 2021 almost (but not completely) increased to pre-pandemic indicators - they amounted to 99.2% of the level of the second quarter of 2019.
• For the whole of 2021, the Ministry of Economy expects growth of 3%. The 2020 fall is now estimated at 2.8%. All this means that if the forecasts are fulfilled, Russians’ incomes will end the turbulent two-year period 2020–2021 with the usual result—zero growth.
• But the beautiful figure for the second quarter allowed Rosstat to publish statistics without delay - the agency presented reports for the first quarter (then incomes of Russians fell by 3.7%) late: it was supposed to be released on April 20, on the eve of Vladimir Putin’s address to the Federal Assembly, but it was only released 29th. In his message, Putin promised that “the real disposable income of citizens will definitely be restored.”
• High inflation prevented a faster recovery of income, Alfa Bank chief economist Natalia Orlova noted in a conversation with RBC. But in the third or fourth quarter of 2021, pre-crisis indicators will be made up, analysts surveyed by the publication have no doubt. Possible budget payments before the Duma elections in September could contribute to growth, Forbes adds . Pre-election government spending has already been the cause of anomalies in the dynamics of household spending.

What's in it for me?

The incomes of Russians are an enchanted indicator: no matter what cataclysms shake the world, no matter what happens to the economy, at best they remain at zero. Business continues to draw conclusions from this - so the largest private airline S7 is launching a new loco-hosting subsidiary, which it would not have thought about 10 years ago.