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reports that 7% (RUB2.3 trillion) of loans have been restructured to ease the pressure of repayment terms, which is again significant but not a burden.
Many of the support measures announced by the Russian government this spring have focused on small and medium-sized enterprises (SMEs) in distressed sectors of the economy. About a third of all firms in these sectors are covered by loan restructurings. As of end-June, over 90,000 SMEs were able to restructure their borrowings of around RUB670bn, corresponding to over 13% of the total lending to the SME sector.
The average Russia has been hurt by the slow down, although again it is more of a nasty squeeze than a full blown household crisis.
The share of Russians with average monthly income of RUB15,000 ($210) increased from 38% to 45% during the coronacrisis. A fifth of Russians said their incomes saw a considerable decline, while a third of the respondents had to give up petty and discretionary spending. As reported by bne IntelliNews, the drop in incomes is coupled with a very thin buffer of savings for most Russian households.
Unemployment also continued to rise in May. At the end of the month, Russia had 4.5mn unemployed persons, about 6% of the labour force.
Politically this has increased the pressure on the Kremlin, which successfully rammed through its changes to the constitution that will allow Russian President Vladimir Putin to stay on until 2036 if he wants to. The breakdown of the voting by age was interesting: people who spent their youth in the Soviet Union voted overwhelming for the changes, whereas those that grew up since voted against it. All-in-all about a third of the population were against the changes according to independent pollster the Levada Center, however, only 17% of them actually voted against the changes.
But with the standard of living falling again the propensity of protest will continue to grow. Already feeling a little raw from the referendum, huge protests broke out in Russia’s eastern region of Khabarovsk after the Kremlin arrested the very popular local governor on murder charges. At the time of writing the protests were in their second week and crowds were opening calling for Putin to step down. The Kremlin has been anticipating growing social protest due to the stagnation of the economy but has been caught off guard by the Khabarovsk protests to the point it is afraid to sending in the local police to break up the protests in fear to them defecting and joining the protests.
The solution to this problem has been the 1 2 national projects but the fall in revenues means the Kremlin has delayed much of the spending and pushed the deadlines back from 2022 to 2030 in several cases. Last year’s spending on the projects resulted in the first increase in real incomes for almost six years, but the delay in the projects means that incomes will go back to shrinking again this year and so the political pressure on the Kremlin remains high.
6 RUSSIA Country Report August 2020 www.intellinews.com
