Russians' real incomes shrank last year for the first time since 2000 as surging inflation overpowered nominal wage rises, according to official data.
Real incomes in December fell 7.3 percent compared to the same month in 2013, contributing to an overall decline of 1 percent for the year, the state statistics service Rosstat said.
The decline is a reversal for President Vladimir Putin, whose 15-year dominance of Russian politics was built on economic stability and fast-rising living standards.
Russia is now on the cusp of a recession, with the economy expected to contract by up to 5 percent this year. Western sanctions over Putin's decision to annex Crimea last year and support separatists in eastern Ukraine have combined with a collapse in the price of oil, Russia's key export, to more-than-halve the value of the county's ruble currency since last summer. Fueled by ruble devaluation, inflation has skyrocketed, hitting 11.4 percent last year.
Real wages are likely to shrink further. Russia's Economic Development Ministry last month forecast that real incomes would fall by 2.8 percent this year as inflation continues to grow. Media reports on Thursday cited analysts estimating contractions of up to 10 percent.
According to Rosstat, Russians on average earned 32,600 rubles — or $470 at current exchange rates — per month last year, 9.2 percent more in nominal terms than in 2013.
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.
