Page 17 - RusRPTNov23

Nominal wages: Russian real incomes were falling slowly for years before the war, but the combination of low inflation, increased public spending on defence and the tight labour market have combined to push nominal wages up rapidly and make real incomes rise as well.
Until the war in Ukraine ends those forces remain at play, however, as inflation is expected to keep rising, real incomes will fall sharply next year, until the CBR has mastered inflation in 2025 when they will start to rise again.
“analysts expect higher growth in 2023, at 12.3% (1.1 p.p.) with growth slowing to 8.1% (0.3 p.p.) in 2024, to 6.5% in 2025. The growth forecast for the end of the forecast horizon is 6.0%. Calculations based on analysts’ forecasts of nominal wages and average CPI suggest that real wages will increase by 6.1% in 2023, by 1.6% in 2024, by 2.1% in 2025 and by 1.9% in 2026. Accordingly, by the end of the forecast horizon real wages will be 12.5% higher than in 2021,” the CBR said.
Consolidated budget balance: The budget deficit has been on a real roller coaster ride this year, starting off in a deep RUB1.7 trillion shortfall, before starting to recover in the first quarter and going back into profit in May. As Russian Finance Minister Anton Siluanov predicted at the start of the year oil revenues have recovered and the government is on course to hit the Ministry of Finance’s 2% of GDP target.
More recently Siluanov said that the deficit this year might be as little as 1% of GDP thanks to rapidly rising oil prices.
17 RUSSIA Country Report November 2023 www.intellinews.com