Page 46 - RusRPTMar21

4.5.2 Income dynamics
Although real wages were up 2.2% y/y last year, real disposable incomes declined 3.5% y/y amid a surge in unemployment, which reached 5.8% in 2020. It was the biggest fall in income since 2016.
This year incomes are expected to rise as the government loosens the purse strings ahead of the Duma elections in September. The government is also concerned about the discontent caused by falling incomes that has lead to an upswing in popular protests and will be looking for ways to hand more money to the population. This could also help keep inflation high in 2021.
While the income data for January is not yet available, December salary performance was significantly higher than expected, with 4.6% y/y growth in real terms, much better than November's 0.2% y/y and market expectations of -1.5% y/y. The growth structure points at improvement across most of the sectors, which is a change vs. the outperformance of public sectors seen for the most of the year. This may reflect year-end bonuses and is the only truly positive income factor that we see from the dataset.
The overall income structure appears weak. According to ING estimates, the 3.5% drop in the real disposable income in 2020 was assured entirely by the 7.5% y/y drop in the private sector (including private sector salaries and other forms of transparent and grey income) and somewhat dampened by a 3.2% y/y increase in state-driven income, including public sector salaries, pensions and other social benefits.
46 RUSSIA Country Report March 2021 www.intellinews.com