Enjoying ad-free content?
Since July 1, 2024, we have disabled all ads to improve your reading experience.
This commitment costs us $10,000 a month. Your support can help us fill the gap.
Support us
Our journalism is banned in Russia. We need your help to keep providing you with the truth.

Experts Raise Questions Over Strong Russian Official Economic Statistics

Analysts struggle to explain an unexpected jump in real incomes and GDP recorded by the official Russian statistics agency.

Russian economy-watchers see signs of falling living standards. Mikhail Pochuyev / TASS

Economists have raised questions over a surprisingly healthy batch of economic data released by the Russian statistics agency Rosstat.

Statistics published Thursday evening showed an unexpected and significant jump in real disposable incomes of an annual rate of 3% in the third quarter of the year, off the back of a 0.1% fall in the second quarter. It was the fastest recorded growth since Rosstat started publishing such data in 2014, and follows months of debate among Russian economy-watchers about the deterioration in living standards in the country over recent years.

GDP was also reported to have climbed 1.9% over the past 12 months, up from 0.9% in the previous reading. That increase comes against a slew of growth downgrades from international organisations, including the World Bank and the International Monetary Fund (IMF), which recently cut their forecasts for 2019 growth to 1% and 1.1% respectively.

“In short, the figure raises questions,” said Kirill Tremasov — a former economist at the central bank and Economics Ministry who has been vocal in his scepticism over the quality of numbers produced by Rosstat. 

“I do not have a clear explanation for the explosive growth of household incomes. All this looks very strange against the background of lower consumption and unchanged real wage dynamics,” said Tatiana Evdokimova, chief economist at Nordea Russia.

Disposable income statistics differ from measurements of wages in that they strip out taxes and spending on essentials, while including the effects of welfare payments and different sources of income like undeclared jobs or investment returns. They are seen by economists as a more accurate measurement of living standards.

Tremasov also pointed out that the growth in disposable incomes contrasts with a surprise slowdown in retail spending which was also recorded yesterday — as the retail industry recorded its slowest annual sales growth in more than two years at 0.7%. 

“The sustained slowdown in the retail sector looks strange if you take the income statistics seriously,” he said.

ING’s chief economist Dmitry Dolgin said the income growth could only be explained by a massive increase in the number of people in employment or growth in wages. However, there was little suggestion either had occurred, and other analysts highlighted that even when wages jumped significantly in 2018 — around the time of the presidential election — this did not translate into such a marked increase in disposable incomes as was recorded yesterday.

The growth in GDP, which accelerated from 0.9% to 1.9% on an annual basis also left economists sceptical. 

Dolgin said that around 0.2 percentage points can be attributed to “a pick-up in agricultural output on favourable weather and harvest conditions. [But] the rest of the growth structure remains non-transparent and requires further clarification.”

… we have a small favor to ask. As you may have heard, The Moscow Times, an independent news source for over 30 years, has been unjustly branded as a "foreign agent" by the Russian government. This blatant attempt to silence our voice is a direct assault on the integrity of journalism and the values we hold dear.

We, the journalists of The Moscow Times, refuse to be silenced. Our commitment to providing accurate and unbiased reporting on Russia remains unshaken. But we need your help to continue our critical mission.

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 you can be confident that you're making a significant impact every month by supporting open, independent journalism. Thank you.

paiment methods
Not ready to support today?
Remind me later.

Read more