Page 24 - RusRPTApr24

2.9 Russians have never lived so well as they do today
Russian President Vladimir Putin would have probably won the elections even if they were free and fair as Russians have never lived as well as they do today. The economy would have powered Putin to victory.
Nor do people believe that things are about to get worse. This is particularly notable in Russia’s regions, far from the hipsters of Moscow and St. Petersburg, reports The Bell.
An economy that is growing because of the needs of the military and rising government spending has ensured wages outstripping inflation.
After the start of the war, inflation rocketed – but wages more than kept pace. Central Bank head Elvira Nabiullina said Friday that the economy’s “production capacity and labor reserves are almost totally committed.” In other words, there is no way of boosting production and the labor shortage is ongoing. That means salaries will continue to rise. Same the inflation.
The fact that Russians are living better is evident from their outgoings. Spending at cafes and restaurants, for example, is increasing.
Demand for non-food goods (i.e. items where purchases can be postponed or even canceled) has recovered from its slump in the months after the full-scale invasion of Ukraine in 2022. Its rate of growth now exceeds both inflation, and wage increases.
This does not look like the sort of panic buying that happens in a crisis, when many rush out to buy whatever consumer durables they can afford. Instead, Russians appear to have sufficient confidence in their finances to take out personal loans. Consumer confidence is approaching record levels, Nabiullina told reporters on March 22.
Of course, increased prosperity is not universal. But those who have lost out are the more wealthy Russians. The average income of the richest 10% in Russian society has increased by 27% since the start of the war. While this may seem a lot, it’s the lowest rise of all 10 income groups, and barely matches the combined inflation rate for the past two years. Incomes for the poorest in society have grown much faster.
“A large-scale redistribution of resources in favor of the less well-off has prompted a widespread shift in perceptions of justice for the first time since 1990,” Denis Volkov, director of independent pollster Levada Center, wrote in an article last month. According to Levada, the proportion of Russians who feel that the distribution of material wealth in Russia is getting more unfair fell from 45% in 2021 to 25% in November 2023.
The war has caused disproportionate economic suffering for a small minority of privileged Russians living in big cities, working for international companies (or companies integrated into global networks) and regarding themselves as “citizens of the world.” The Kremlin has apparently given up on this group.
24 RUSSIA Country Report April 2024 www.intellinews.com