Page 37 - RUSRptApr17

4.5.2 Income dynamics
Russian real wages expanded +1.5% y/y in March. March marks the eighth consecutive month of uninterrupted real wage growth. Firmer household budgets are at last healing the consumption patterns, as confirmed by Rosstat consumer confidence index returning to 4Q14 levels and Public opinion fund/CBR’s survey.
In both, respondents indicate growing propensity for big-ticket purchases. Correspondingly, March retail non-food sales expanded +0.6% y/y, the first advance since December 2014. The turnaround in consumption, however, will be neither overly fast, nor too large.
Economists expect annual consumption growth consistent with +2-3% real wage growth and the cautiously positive retail lending expansion at approximately the same rate.
Real disposable income was down -2.5% y/y , while real wages have expanded 1.5% y/y. Rosstat’s survey of households’ budgets suggest that the savings ratio continues to decline, if adjusted for seasonal patterns and one-offs. An average household currently saves about 10% of its money income, just 1.0-1.5pp more than the average typical for 2011-13. This means that further improvements in household confidence are likely to promote consumption recovery, but the scale of this effect is now limited.
Although real wages printed a lower growth figure (1.3% y/y) in February
than a month ago (3.1% y/y), it still remains firmly positive helped by declining inflation and the relatively stable nominal wage growth of 6.0% y/y. The unemployment rate, on a seasonally adjusted basis, remains flat at 5.3% of the economically active population.
Rosstat found that 40% of the population is “poor” and one in ten live on less than RUB10,500 a month – well below the mean income of RUB36,000. Another 65% of the country live on less than four-times the median income, classifying them as middle-class.
The kind of job a Russian has makes a big difference to their income. The worst paid jobs are in agriculture, light manufacturing, education and healthcare. The best salaries are in mining, finance, real estate and public administration.
Russian doctors are earning less per hour than the country's fast food workers, a new report into the Russian healthcare system reports the Moscow Times. Experts from the Center for Economic and Political Reforms (CEPR) found that doctors earned 140 ($2.46) rubles per hour, compared to the hourly wage of 146 rubles ($2.57) for a supervisor at global fast food chain McDonald's. Paramedics were found to earn an average of 82 ($1.44) rubles an hour, while mid-level health staff received just 72 rubles ($1.27), the RBC news site reported.
The cost of living fell unexpectedly in the fourth quarter of 2016 by 2% to RUB9,700 – the cost of a basic shopping basket. The fall was ascribed to the bumper harvest last year, especially the fall in the cost of vegetables.
37 RUSSIA Country Report April 2017 www.intellinews.com