Page 40 - RUSRptApr17

4.5.4 bne Despair index
Half of Russia's population are at risk of falling into poverty, but the bne IntelliNews despair index is recovering.
In its latest update on Russia the World Bank said some 21.4mn people, or 14.6% of the population, fell below Russia's national poverty line in the first half of 2016, after disposable incomes shrank on average by 5.8%.
Russia’s poverty rate has been creeping up all year from 13.4% in January to 14.6% in the middle of this year.
Nominal wages have started to recover as the fallout from the rapid collapse of oil prices at the end of 2014 fades. Real wages dropped by over 10% in the latter part of 2015 as inflation soared, but since the start of this year they recovered and even briefly turned positive in February and March (rising 0.6%, 1.5% respectively).
The improving conditions in real income and low unemployment have depressed bne’s despair index to 23.6 in March vs the theoretical residual level of 6 (the sum of 2% inflation, 4% unemployment, 0% poverty) -- the best result since 2013 when the index fell to 23.16 and on a par or lower than most of the EU countries.
Russia’s despair index reached a peak of 33.7 in September 2015 and was elevated at about the same level for all of 2015. Russia’s despair index hit a mind boggling peak of 2,333 in the early 90s ,
The index post Soviet low was 21.5 in 2012. Scores over 30 are a real problem for governments as they represent levels of pain amongst the population that spark social unrest.
40 RUSSIA Country Report April 2017 www.intellinews.com