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Wednesday, February 21, 2018

Russia will face a time of mass poverty

The population should prepare for a further decline in real incomes. Moreover, it will be delayed for several years. Moreover, the government will begin to withdraw from social obligations. As a result, analysts say the center of the Higher school of Economics, Russia will pull back in times of mass poverty.

photo: Gennady Cherkasov

Under the baseline scenario economists”, at $35 a barrel, Russia’s GDP in 2016 will fall by 1.6%. But there is an optimistic scenario: the price increase in 2016 to $45 per barrel and up to $50 per barrel in 2017 or 2018. In this scenario, GDP in 2016 will fall 0.8%, the budget deficit will amount to 2.7% of GDP. However, in the period 2015-2019, the domestic economy will reach 5.6% of GDP.

But this is only the beginning. Analysts expect a refusal of the state from social obligations. Many public services can be paid. In other words, to obtain, for example, medical care in an urban clinic, have to fork out. And this, in turn, threatens the growth of poverty, morbidity and mortality in the country. Analysts expect the falling incomes in the range of 22-30%. However, only in 2016 purses of Russians “lose weight” at 5%, and pensions will fall by 3%.

“Balancing the pension system without reform, simply due to the gradual impairment of pension liabilities back to the days of mass poverty”, — is spoken in the report of the development Centre.

– If Higher school of Economics predicts the impoverishment of the population, then it sees negative trends in the labour market with a possible decrease in the demand for labour and lower salary offers, said senior analyst of FOREX CLUB Alena AFANASYEVA. – However, current estimates of the largest recruitment agencies tell a different story. If you take the Moscow market as a leading indicator (it is usually more responsive to the crisis and the first out of it, demonstrating a higher demand for specialists), the obvious demand for it jobs. Last year it grew by 3% in the most severe crisis period. Moreover, according to the Agency HeadHunter, the demand for labor over the past year increased by 14%. The company has adapted more clearly appreciated their perspectives, and some realized that “went too far” with cost optimization. At the moment the preconditions for large-scale “impoverishment” of the population we do not see. In addition, it is likely that real disposable income over the next six months will cease to fall against a backdrop of more subdued price pressures”.

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