Foreign language April, 2019 of the analytical review – The Monitoring of Socio-Economic Situation and Perceptions of the Population
Foreign language April, 2019 of the analytical review – Monthly Monitoring of Socio-Economic Situation and Perceptions of the Population. Analytical material prepared by a pool of experts of the Institute for Social Analysis and Prediction of the Russian Presidential Academy of National Economy and Public Administration.
Main conclusions of the issue:
- The Ministry of Economic Development has released preliminary estimates on GDP growth for January and February 2019 – 0.7% and 1.5%, respectively. On the one hand, obtained values demonstrate slowdown of economic development compared to December 2018 (2.3%), however, on the other hand, they exceed previously made forecasts.
- According to the estimates released by the Ministry of Economic Development inflation in Russia in February 2019 was not boosted by the VAT rates rise, which effect was observed in January (0.8% to the previous month) but ran dry later (0.4% to the previous month in seasonally smoothed terms). According to figures provided by the Bank of Russia, as of March the annual rate of inflation temporarily increased to 5.2% and is expected to stay at 5.5% in March-April.
- According to the Bank of Russia data, for January-February 2019, the corporate loans portfolio went up by 1.4% (first of all, its ruble component), meanwhile personal loans portfolio – by 2.6%. Away from the currency trend has remained. Personal deposits increment minus the effect of currency revaluation in February stood at 1.6%
- The inflation level in February 2019 against the corresponding period of the previous year came to 5.2%, including 5.9% regarding foodstuffs, 4.6% non-food goods, and 5.1% services. Thus, during first two months it came close to Bank of Russia projections for H1 2019 (5.5-6%).
- Over 2018 the Russian population borrowed from the banks to the tune of Rb 12.5 trillion – a record amount (a year earlier – Rb 9.2 trillion). Population’s bank debt hit Rb 14.9 trillion and its growth in nominal terms to the previous year came to 22.4%. Much higher by 23.6% grew individual mortgage debt.
- Against the backdrop of loans issuance growth the share of past due debt at year-end decreased to 5.1%, at the same time mortgage loan overdue payments came to 1.1% (in 2017 – 7.0% and 1.3%, respectively). Mortgage backed loans constitute 24.2% of the overall amount of loans issued to the population. And 9.7% of the amount – car loans debt.
- At year-end 2018, personal bank deposits amounted to Rb 28.6 trillion, Including 21.8% - foreign deposits and precious metals. Population bank deposits 1.92-fold exceed personal loan debt.
- In 2018, loans and bank savings grew faster than population’s cash income. Population’s bank debt came to 25.8% (in 2017 – 21.9%) against the volume of annual income. Personal bank savings hit in late 2018 nearly half (49.7%) of annual cash income of the population.
- February observed the employed number growth by 0.2 million persons, meanwhile the number of jobless remained practically unchanged compared to January. The number of officially registered unemployed increased by 65 thousand persons and hit 798 thousand persons.
- According to preliminary estimates released by Rosstat, the average monthly nominal wage of corporate employees amounted to Rb 43,030 in February, which is up 0.7% in nominal terms against February last year. Rosstat has also revised January wages and according to official estimate they grew at 1.1% taking inflation into consideration (was 0.2%).
- In 2018, the highest wages growth was observed in the health care sector (up 23.7%), education (14.2%), information and communications (12.8%), culture and sports (12,5%). Least of all, wages grew in public administration (up 6.1%), commerce (6.3%), and power sector (6.6%).
- 2018 saw increase in working hours in large and medium-size enterprises and hit 1,764.2 hours, up 5.4 hours against 2017.
- In 2018, the number of quitting job in large and medium-size enterprises exceeded the number of hired workers by 331 thousand persons.
- From Q1 2019 information on cash income of the population will be calculated according to new version of the calculation methodology of cash income index. Change over to the new version of methodology will result in the shift in the structure of cash income: significant reduction of the share of non-observable income and growth of the remuneration of labor.
- 2018 saw certain decrease of the monetary and subjective poverty of the population. The share of individuals with average per capita income below the subsistence rate constituted in 2018 12.9% below the 2015-5017 level, however above the 2010-2014 indicators. The share of population estimating their material state as “bad” or “very bad” came to 25.2% in 2018 and was below the level observed in 2015-2017.
- The level of income inequality in 2018 remain unchanged against 2017 and remained below the 2006-2016 level.
- Over 2018, natural population loss in Russia amounted to 218.4 thousand persons. This was due to continued contraction of births and small reduction in the mortality rate. According to preliminary data released by Rosstat, expected life expectancy constituted 72.84 years (men – 67.66 years, women – 77.87 years). Aggregate birth rate index came to 1.597 per a woman in childbearing age.
- In 2018 Russia set an abysmal record regarding migration growth, which decreased to 124.9 thousand persons and did not allow to offset the increasing natural population loss.
- Temporary migration as a whole to Russia changes slightly just like the number of migrant workers. Their main contingent comes from CIS countries with the majority from Central Asia and minority – from western CIS countries.
- Year’s results have been more positive for the regional budgets, but hardly sustainable: the revenues growth was boosted by increase of transfers by 22% and proceeds from the corporate income tax in the context of the resources world prices growth. Budget outlays have been dominated by social priorities (health care and education), which resulted from the implementation of wage decrees. Social safety net expenses reported stronger regional differences, herewith the expenses on benefits (minus insurance contributions to MMI for non-working population) were increasing not above the inflation rate if to exclude spending on benefits from the Moscow budget, which went up by 30%.
- In March 2019, the majority of the respondents assessed the economic development of the country as a stable one, given that 35.3% of the respondents noted the deterioration in economic situation, and solely 18.6% registered its improvement. One quarter of the population positively consider the prospects of economic development.
- Passive form of adaptation to the changes in the economy continue dominating, first of all – reduction of income. Significant share of the population use compensatory financial strategies including: sale of property, go in for borrowed funds.
Integral estimate of satisfaction with various aspects of life looks like normal distribution, which exhibits a sufficient level of perceptual stability of the socio-economic environment.
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