"Growth" of the Russian economy has found a sad explanation

The crisis in Russia is over! Our economy is growing! For the past month, officials have been repeating these words like a mantra. And, apparently, in order to inspire confidence in the people, they are bombarded with data on GDP. The other day, Rosstat reassured that in the first quarter of 2017, in annual terms, the Russian economy, according to preliminary estimates, grew by 0.5%. As for the future, here the forecasts are even more optimistic. The Central Bank believes that in the II and III quarters, growth will accelerate to 0.9-1.3%. And if the Ministry of Economic Development is to be believed, by the end of this year, we are expecting an almost two percent growth.

 

photo: Alexey Merinov

 

It would seem that there is reason to rejoice: after a two-year fall, such results are a balm for the soul.

True, they are more likely to amuse the vanity of the officials themselves than to make the Russians happy. Like, that's how good we are. Yes, and before the president is not ashamed to appear in front of the eyes. “Fulfilling the president’s wishes to achieve and surpass world rates, we will wittingly or unwittingly engage in Potemkin’s GDP growth,” says Vladimir Gurevich, adviser to the rector of the RANEPA. By the way, in the course of a recent direct line, Vladimir Putin himself told the population about the growth of the economy .

But independent experts are in no hurry to celebrate the emerging growth. “The process that we are now witnessing cannot be called sustainable economic growth,” says Natalya Akindinova, director of the HSE Development Center. And the head of the economic expert group, Yevsey Gurvich, connects it exclusively with the fact that the price of oil increased by 20%. The prayers of our government, which hopes for a rise in the price of "black gold", have been answered. But, as experts warn, it is too early to relax. The oil market is unpredictable. But there was no new model of economic development, and there is not.

Meanwhile, ordinary people hear a lot about this notorious GDP growth, but they don’t see it point-blank. And here you don’t have to calculate anything - just look into your wallet, which is treacherously empty month after month. The real disposable income of our citizens has been declining for the fourth year in a row. And this is not opposition propaganda, but Rosstat data. In 2016 alone, they fell by 5.9%. The picture did not improve in 2017 either: in January-May, the wallets of our compatriots lost 1.8%.

Moreover, as Igor Nikolaev, a professor at the Higher School of Economics, notes, the income structure has dramatically changed. The share of social payments in them reached a maximum since Soviet times and amounted to 19.2% in 2016. For comparison: nine years ago this figure was 11.6%.

There is also no consolation in business income, which has been at an all-time low for several years. Now they are at around 7.8%. The maximum value of 18.6% was reached already in 1993.

“In fact, people in their incomes begin to depend more and more on how much the state gives them, and to a lesser extent on their own activities. This largely explains the fact that our dynamics of household income lags behind the dynamics of economic growth,” Nikolaev notes. According to him, if GDP growth does not result in an increase in the living standards of the population, then "this is flawed growth, and we do not need it like that."

 

photo: Gennady Cherkasov

 

“The grounds for the growth of the population's income have not yet been formed due to the fact that our economy has been and continues to be of a raw material nature, and its growth depends on oil prices. And the income of the population depends on the dynamics of inflation, which is not directly related to the price of oil,” Akindinova said.

And inflation doesn't seem to stop. Moreover, the rise in prices did not curb even the summer season, when, in theory, fruits and vegetables should become cheaper. But the Russian economy lives by its own laws. Since the beginning of this year, the minimum food basket has risen in price by 9.4% to 4,037 rubles. Experts blame the cold summer for what happened. However, such explanations do not make people feel better. Always want to eat. So you have to scrape the last money out of your wallet and thereby support the Russian economy.

Meanwhile, in the “fat” zero years, the trend was completely different - GDP growth was accompanied by a slow but steady increase in salaries for state employees, pensions and, in general, incomes of the population. Now the picture is just the opposite. As a result, according to experts, in Russia in 2017, a completely new, hitherto unseen phenomenon emerged - economic growth, which occurs, in essence, due to a decrease in the income of the population. The government simply does not spend money on us, which allows the Russian economy to stay afloat. This is the price of these same 0.5% growth.