Russia records the lowest level of poverty since the early 1990s

In general, in 2022, 15.3 million Russians, or 10.5% of the population, had incomes below the poverty line. This is the lowest number of poor people since the early 1990s.

In 2022, 15.3 million Russians, or 10.5% of the population, were below the poverty line in RUSSIA, Rosstat reported. This is 0.7 million people, or 0.5 percentage points (pp) lower than the result of the previous year and a record low figure in the history of the Russian Federation (Rosstat has ranks since 1992).

The last time close values ​​of the poverty rate were recorded in 2012: then 15.4 million citizens, or 10.7% of the population, were classified as poor.

On average, the poverty line last year was 13,545 rubles. - people with incomes below this level are recognized in statistics as poor. According to the national development goals of Russia, by 2030 the poverty level in the country should decrease to 6.5% of the population (a two-fold decrease compared to 2017).

In the fourth quarter of 2022, the number of citizens with incomes below the poverty line was less than the average for the year - 11.6 million people, or 7.9% of the country's inhabitants, Rosstat reported (in the fourth quarter of 2021 it was 8.5%) . The annual level ultimately corresponds to the value of the third quarter, when 15.3 million people, or 10.5% of the population, were also below the poverty line. The intra-year indicator usually decreases from the first quarter to the fourth.

What is the poverty line

When determining the poverty level, Rosstat applies the “poverty line” parameter introduced at the end of 2021. It corresponds to the value of the consumer basket value in the fourth quarter of 2020 (the so-called basic poverty line), multiplied by the consumer price index for the past period by the fourth quarter of 2020.

Until 2021, as a criterion for the poverty line, the subsistence minimum was used, based on the cost of the consumer basket at the corresponding point in time, taking into account mandatory payments and fees.

The use of the “poverty line” parameter makes it possible to ensure maximum comparability of the “poverty rate” indicator over the entire length of the time series, that is, since 1992, according to Rosstat.

Reasons for the decline in the number of poor

Rosstat identifies several main drivers of the positive dynamics of the poverty level in Russia. Namely:

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Support for families with children has made a positive contribution to poverty reduction: for example, as of January 1, 2023, more than 3 million low-income families with 4.2 million children aged three to seven inclusive received monthly cash payments. And the allowance for children aged eight to 17 years, which was introduced from April 1, 2022, covered 3.7 million families and more than 5.5 million children, the department said. Budget expenditures to support families with children in 2022 amounted to more than 1 trillion rubles, said Finance Minister Anton Siluanov.

In addition, pensions were additionally indexed by 10% in 2022, which also supported the reduction of poverty. More than 400 billion rubles. was additionally sent to citizens, as a result of which the average pension increased to 19.3 thousand rubles.

The share of social payments in the structure of household income in 2022 amounted to 20.7%, Rosstat reported.

Growth in per capita nominal income of the population

In 2022, the indicator increased by 12.4% and amounted to 45.3 thousand rubles, Rosstat indicated. In turn, wages played the largest role in the income structure — its share amounted to 57.2%. The average accrued salary in nominal terms during this period increased by 12.6%, to 64.2 thousand rubles. At the same time, the poverty line in 2022 increased by 13.7%, which corresponds to inflation on average for the year.

The share of income from entrepreneurial activity in the structure of income is less significant - 6.2%, but it also made a positive contribution to the growth of nominal income, follows from the data of Rosstat. Receipts from entrepreneurship increased by a quarter over the year.

At the same time, in general, for 2022, real cash income decreased by 1.4%, and real disposable cash income (after deduction of mandatory payments) - by 1%. Among the reasons are high inflation, as well as the effect of the high base of last year, when recovery growth was recorded in most industries after the covid-19 pandemic , Rosstat notes.

Among other factors that influenced the reduction of poverty in 2022, one can single out a decrease in the number of unemployed citizens, said Alexander Safonov, professor at the Financial University under the government. “In 2022, the unemployment rate dropped to historic lows, which means that the number of poor and unemployed should have also decreased,” he notes. In parallel, there was a shortage of personnel, which spurred the growth of nominal wages. “In aggregate, only people receiving a social pension remained below the poverty line,” Safonov emphasizes.

But Rosstat data is somewhat arbitrary, and there are a number of other approaches to measuring poverty, he says. “In fact, live on 13.5 thousand rubles. [poverty line] unrealistic. It would be more correct to estimate the level of poverty in terms of family expenses and classify as poor those who spend more than 55% of their income on food. However, it would be too expensive for the state,” the expert sums up.