Back in the 90s, the Russians were back in the gardens

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Назад в 90-е: россияне вернулись в огороды

The Russians do not believe the government promised economic growth using the survival tactics of the 1990-ies — storing edibles with country gardens. At the same time trying to maintain an acceptable standard of living the population of the poorest regions began to take on more consumer loans. Experts say that Russians are used to the sluggish crisis, ignoring the sharp deterioration in its financial position.

The people of Russia have yet to feel the government promised economic growth. In June 2017, according to Rosstat, real disposable monetary incomes of the population has not changed in comparison with June of 2016. In January – may declined by 0.8%.

As a strategy to improve the financial situation of the Russians in 2017 to choose the production in personal subsidiary plots. To such conclusion experts of the Ranepa, the Gaidar Institute and the Russian Academy of foreign trade (VAVT) in its “Monitoring of the economic situation in Russia.”

Economists cite data spring studies of the Institute of sociology, according to which provide themselves with food grown in his household, almost a third of respondents (32%), which is 12 percentage points higher than in 2014.

“Thus, in the behavior of the citizens is dominated by archaic forms of improve their financial situation, common during the crisis of “survival” in the 1990-ies, rather than active innovative practices”, — concluded the experts.

Private farms are not only a survival tool but also a particular insurance in the event of adverse changes, said Sergei Zaversky, head of Department of analytical researches of the Institute of comprehensive strategic research (ICSI). “Insecurity is one of the important consequences of crises, and he in any case have to get rid of, even if the growth rate will be at the level projected,” — said the expert.

According to a recent study, conducted by the Levada center, a significant portion of monthly income Russians spend on buying food: food 23% of respondents spend two-thirds of earnings, 20% — slightly less than half, and 10% — all the money.

The experts add that the middle class has also had to change the strategy of consumer behavior. For example, in the second quarter of 2017, the share of those who save on eating out amounted to 69% (same period of 2016 — 73%), and 63% of middle-class people trying to save on vacation (in the second quarter of 2016, their share was 60%).

At the same time the volume of issued consumer loans to individuals in June 2017, has increased over the month by 1.1%. National credit Bureau notes that in the first half of 2017, compared to the same period in 2016, the volume of outstanding consumer loans increased by 38.4%, while the number of consumer loans 28.9%.

Experts on the basis of the analysis noted that the highest growth in the volume of these loans recorded in regions with high levels of poverty.

“So the population is trying to partially offset the prolonged decline in real income of the borrowed funds.

Higher growth in the volume of loans to individuals in poor regions suggests that loans for low income strata are becoming the real way to support anything like an acceptable standard of living,” write the economists.

In Russia as a whole the share of population with money incomes below the subsistence level in the first quarter of 2017 is 15%, which is below the level of the first quarter of 2015 and 2016, but above level of the similar period 2012-2014.

Citizens tend to compare their situation not with the previous year, and that which was before the income in real terms began to fall, and here the gap remains significant in June 2017 real income was more than 11% lower than in June 2013. So stop falling incomes — this is not growth, but only fixing the current level, says Seversky.

Earlier, Finance Minister Anton Siluanov promised that by the end of 2017 incomes will grow by less than 1% in real terms and the economy — 2%. The Ministry of economic development in the basic and target scenarios, also predicts growth in real incomes by 1% in 2017.

“We still do not see the real factors of economic growth above the level of 1-1,5% per year. It is obvious that predicted and us, the Ministry of economic development growth could not be regarded as acceptable,” indicate the economists in the study.

Real income growth will not be until the end of the sanctions war or before the beginning of qualitative changes in the Russian economy that is likely to occur even later than the lifting of sanctions, the head of marketing Agency “Alekhine and partners” the novel Alekhin. The growth of real income means that your income of the average citizen will be able to purchase more goods and services. Therefore, must either increase income, or decrease the price of goods and services in the market. There are no prerequisites for either one, or the second, says the expert.

The Deputy Director of the Institute of world economy and international relations Yevgeniy Gontmakher also noted that prerequisites to substantial improvement in the standard of living of the population yet.

We have seen a situation where the economy has grown, and incomes continued to fall. If by the end of the year will be an increase of 1.5–2% of GDP, incomes may increase, but we are talking about very small values is tenths of a percent, he said.

In the first quarter, you can see that the growth was mainly provided by only a few economic activities: first, mining second, the transportation and storage finally, although to a lesser degree, public administration, military security and social security, draws attention Seversky. But these industries account for less than 20% occupied. The population’s sense of growth, significant improvements should be observed on a wider range of activities, and furthermore, they should be reflected in real disposable income, he said.

Meanwhile, head of the laboratory of studies of pension systems actuarial forecasting of social sphere of the Ranepa Elena Grishina notes, “habituation of the population to slow the crisis (including stable small decline in real income) has led to the fact that citizens no longer feel a sharp deterioration in their financial situation”.

Surveys of the public opinion Foundation in July for the years 2015-2017 show that Russians became more positively assess their financial situation. If in July 2015 and 2016, the proportion of persons who consider that their financial situation over the past two or three months deteriorated, were respectively 44% and 32%, in July 2017 28%.

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