Pavel Sergeevich, happiness is not in money, but in quantity, people often joke. What is our current situation with household income?
Pavel Seleznev: If we talk about the well-being of Russians, it is best to rely on the dynamics of their income. This is a complex indicator that includes salaries of employees, income from commercial activities, social payments (pensions, benefits, scholarships), property income (dividends, interest on deposits, income from renting apartments, as well as other income, such as gifts… And to understand how this indicator changes, it is necessary to look at the dynamics of real income, free of inflation.
Data for the second quarter, the latest data calculated by Rosstat, show that the real disposable income of the population, that is, income net of inflation, grew by more than 5% compared to the same period last year. And if we take longer time intervals, then, according to the results of the second quarter, we have practically returned to the level of income that we had in 2013. And during this period, the income of the Russians was at a fairly high level. At the same time, it is obvious that income dynamics across the country are uneven; There are regions where incomes are higher or growing faster, and there are territories where the situation is noticeably worse than in the country as a whole.
And in which regions life is better and in which not so good?
Pavel Seleznev: I will immediately make a reservation that it is better not to take last year as a basis, because it was a time of economic restructuring. To better understand what is happening in the regions, it is preferable to rely on the indicators from the penultimate year, 2021. In the country as a whole, nominal income grew by 24% in the second quarter, which, with inflation in the same period of just over 20%, gives us an increase in real income of 3.2%. That is, wherever income has grown more than the inflation rate, its growth in real terms is positive. Thus, according to the results of the second quarter, we have 73 territories with a real positive dynamic of citizens’ income, and only 14 territories where they remained the same or decreased. The leaders of growth are Karelia, the Kurgan and Kirov regions, the Kabardino-Balkarian Republic, Tatarstan and the Altai Territory; here the real income of citizens has increased by 20% or more in two years.
But the region is both a regional center and small towns and villages. In big cities life is always better than in small towns, where people try to leave…
Pavel Seleznev: Yes, you are right, the situation within each region is also uneven. In the end, people do not live in regions, but in very specific cities in our country. Therefore, we also evaluate the dynamics of population income by city. However, there is a problem. Rosstat only provides salaries by city, with the exception of large cities that are also subjects of the Federation: Moscow, St. Petersburg and Sevastopol. However, there are problems here too: in Moscow, for example, there are many people whose income is not included in official statistics. Unfortunately, there are many people in the city who work in the “gray” or are not registered at any job. Maybe if we add all the super-rich Russians registered in Moscow to the common population, this will happen. However, registering does not mean that they spend their money in the capital. We, at the Financial University, prefer to make estimates of the income level of citizens based on their consumption activity, data that we collect through sociological research. In addition, we use open statistics at our disposal on various aspects of Russian consumer behavior.
And what do your grades show?
Pavel Seleznev: According to our estimates, the average level of per capita income in Moscow until this summer is approximately 61 thousand rubles per month. In St. Petersburg there are also discrepancies between official data and our estimates, only they are much smaller. Rosstat estimates that the average per capita income in St. Petersburg is 66 thousand rubles per month, our estimate is 55 thousand rubles. That is, in fact, Moscow and St. Petersburg differ slightly in terms of living standards. In Sevastopol, the situation is the opposite: the official average per capita income is 37 thousand rubles, our estimate is 43 thousand rubles.
According to our estimates, the Russian cities with the highest level of per capita income are Moscow, Saint Petersburg, Yekaterinburg, Sochi, Khabarovsk, Murmansk, Krasnodar, Samara, Donetsk and Mariupol, Vladivostok, Krasnoyarsk, Kaliningrad, Yaroslavl, Kazan, Tyumen, Novorossiysk, Surgut, Rostov-on-Don and Kaluga.
In large cities of new territories, is the population’s standard of living also increasing?
Pavel Seleznev: Yes, Donetsk and Mariupol are among the cities with the highest income level. Among other things, this is the result of investments made by the budget to improve the lives of the population and develop new Russian territories.
We saw the highest revenue growth in the following cities: Donetsk, Sochi, Khabarovsk, Lugansk, Vladivostok, Yekaterinburg, Saratov, Krasnodar, Kazan, Sevastopol, Ufa and Perm. Real income growth in them was 10% or more. The record holder is Donetsk, where, according to our estimates, they grew by 48% in 2 years.
What are the forecasts? Our economy is traditionally volatile: growth today, decline tomorrow…
Pavel Seleznev: We hope that the real incomes of the population will continue to increase. There are all the prerequisites for this: demand for labor and record unemployment, additional budget expenditures on social security. But we don’t expect strong growth. Because at the same time, the increase in the cost of loans to companies will have a negative impact on the growth of citizens’ income. The Central Bank’s official interest rate of 13% means in practice that loans for the development of production will not cost less than 15%. Consequently, where there is no budget financing, business development will slow down. Therefore, there is every reason to believe that with such monetary policy, unfortunately, we will not see high rates of real income growth. I would like to recommend that the Central Bank once again weigh the pros and cons of maintaining a tight monetary policy and make a decision to reduce the rate at the first opportunity. We believe that economic development and increased citizens’ income are a benefit that outweighs the disadvantages of inflation above the 4% target.