Tuesday, October 25, 2016
Russia's Middle Class Is Disappearing
Boris Grozovsky, Moscow Times: The New Poor: How The Ongoing Crisis Has Devoured Russia’s Small Middle Class
This winter will mark three years since Russia abruptly embarked on a course of political and economic isolation. Lower oil prices and the devaluation of the ruble dealt a serious blow to the population’s economic well-being.
By its own evaluation, Russia’s middle class shrank by more than 16 percent, shedding an incredible 14 million people.
This is the fresh data of the so-called “Ivanov Consumer Index” (in honor of Russia’s most widespread surname), evaluated by Sberbank CIB analysts.
A Sberbank CIB survey found that in Autumn 2014, prior to the devaluation of the ruble, 61 percent of Russians considered themselves members of the middle class. That number now stands at 51 percent, with the “missing” ten percent now members of the lower class. The reason: costs are rising faster than revenues. Those with the lowest incomes must reduce consumption of all but vital necessities and find cheaper options for the goods and services they do purchase. As of this summer, real incomes had fallen by 7 percent year on year, and real pensions were down 4 percent after adjustments for inflation.
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WNU Editor: This has always been Putin's political Achilles Heel. I noticed on my last visit in August that the number one concern among my friends and family members in Russia was the economy and not East-West relations, the Syrian war, or even terrorism.