[Russia] Salaries of nearly half of workers fail to cover basic spending

According to new research, the number of Russians whose salary fails to cover their basic spending has jumped by 20 percentage points in two years to almost half, Reuters reports.

The findings, from an October survey of almost 5,000 people by recruiter Headhunter, highlighted Russia's economic struggles and could potentially prove an unwelcome challenge in the run-up to March's presidential election, as Moscow continues to divert record fiscal resources to fund its war in Ukraine.

Record-low unemployment this year is reportedly evidence of Russia's stark labour shortages and the weak rouble has only added to intense inflation pressure. Interest rates - currently at 13 per cent - are expected to rise further to tackle inflation seen ending the year at around 7 per cent, significantly above the Bank of Russia's 4 per cent target.

When asked whether their salary - without income from second jobs or investments - was enough to cover basic spending, just one in five respondents said yes.

"Yes, with difficulty," another 36 per cent of Russian workers said, while 45 per cent said their salary was insufficient. A considerable increase over previous findings of 25 per cent in 2021 and 39 per cent in 2022, Headhunter's survey found.

In 2021, prior to Russia’s invasion of Ukraine, 36 per cent of those surveyed felt their salary was sufficient.

Of the 45 per cent struggling to find enough money for basic spending, more than half said they were at least 20,000 roubles ($212) short per month.

In July, the average monthly nominal wage earned by Russians was 71,419 roubles ($756), according to Rosstat (the Federal Service for State Statistics).

Real wages in Russia are currently growing rapidly as defence companies rush to meet government orders. Other industries are reportedly struggling to retain staff but cannot always compete with salaries.

Double-digit inflation in 2022 caused pain for Russian consumers and, while the economy is set to recover this year from a 2.1 per cent drop in gross domestic product (GDP) in 2022, the country's long-term prospects are dim, according the the International Monetary Fund (IMF) and some of Russia's own forecasts.

Analysts have reportedly warned that Russia could miss its 2024 budget revenue target and be forced to increase business taxes if the rouble proves stronger than expected and optimistic economic assumptions fall short.

Source: Reuters

(Links via original reporting)

According to new research, the number of Russians whose salary fails to cover their basic spending has jumped by 20 percentage points in two years to almost half, Reuters reports.

The findings, from an October survey of almost 5,000 people by recruiter Headhunter, highlighted Russia's economic struggles and could potentially prove an unwelcome challenge in the run-up to March's presidential election, as Moscow continues to divert record fiscal resources to fund its war in Ukraine.

Record-low unemployment this year is reportedly evidence of Russia's stark labour shortages and the weak rouble has only added to intense inflation pressure. Interest rates - currently at 13 per cent - are expected to rise further to tackle inflation seen ending the year at around 7 per cent, significantly above the Bank of Russia's 4 per cent target.

When asked whether their salary - without income from second jobs or investments - was enough to cover basic spending, just one in five respondents said yes.

"Yes, with difficulty," another 36 per cent of Russian workers said, while 45 per cent said their salary was insufficient. A considerable increase over previous findings of 25 per cent in 2021 and 39 per cent in 2022, Headhunter's survey found.

In 2021, prior to Russia’s invasion of Ukraine, 36 per cent of those surveyed felt their salary was sufficient.

Of the 45 per cent struggling to find enough money for basic spending, more than half said they were at least 20,000 roubles ($212) short per month.

In July, the average monthly nominal wage earned by Russians was 71,419 roubles ($756), according to Rosstat (the Federal Service for State Statistics).

Real wages in Russia are currently growing rapidly as defence companies rush to meet government orders. Other industries are reportedly struggling to retain staff but cannot always compete with salaries.

Double-digit inflation in 2022 caused pain for Russian consumers and, while the economy is set to recover this year from a 2.1 per cent drop in gross domestic product (GDP) in 2022, the country's long-term prospects are dim, according the the International Monetary Fund (IMF) and some of Russia's own forecasts.

Analysts have reportedly warned that Russia could miss its 2024 budget revenue target and be forced to increase business taxes if the rouble proves stronger than expected and optimistic economic assumptions fall short.

Source: Reuters

(Links via original reporting)