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February 23, 2018 www.intellinews.com I Page 11
Rising communal charges drive more poor Russians into debt
Ben Aris in Berlin
Growing utility and social costs in Russia have caused an alarming increase in the number of poor Russians driven into debt, and arrears have sextupled in the last three years to $11bn.
The poorest part of the population was already under pressure, as spendable incomes have been falling in the last few years in real terms. While real incomes started to recover last year, partly thanks to the historically low levels of inflation, real disposable incomes – the money left over after food and utilities payments – have not.
Rosstat reported real disposable incomes were flat y/y in January for the first time since 2014, which has been taken as progress. But the amount of cash in a purse that can be used for discretionary purchases has been falling for over three years and rising communal costs in the same period has eaten further into what little spare cash Russians have.
The problem is exacerbated by the cash- strapped regions cutting subsidies on communal housing costs and other support for low income families as municipalities are also short of money. Regions have been struggling to meet wage and social spending hikes ordered by President Vladimir Putin’s May decrees in 2012.
The situation varies from region to region, as the indebtedness of the regions is very uneven. After two years of hell about a dozen of the better off regions are starting to recover and were upgraded to outlook positive by Moody’s in January.
The Supreme Court published statistics on the collection of debts for housing and communal services. In 2014, 2.1mn cases were brought to court, but that rose to 5.4mn in 2017. The recovery of these debts by the courts has doubled, from RUB60bn to RUB120bn in
the same period, reports Vedomosti.