BOFIT Weekly Review 2015/41
Number of people in Russia living below minimum subsistence level up markedly
Largely stemming from last winter’s burst in inflation, real household incomes have been 4–5 % smaller on an on-year basis since last spring. Real wages are down about 9 % since the start of the year. Based on consumer price inflation, pensions have shrunk on-year about 4 % in real terms. Real incomes of pensioners and other people with small incomes have actually contracted more than official figures indicate as food prices this year are up over 20 % y-o-y (consumer prices overall are up 16 %). In 2014, spending on food accounted for over a third of Russian household spending but close to one half in the case of the one fifth of households that have lowest income.
The number of Russians living below the official minimum subsistence level has declined for years, but this year’s contraction in real incomes reversed that trend. In the first half of 2015, close to 22 million people (about 15 % of the population) were living below the minimum level, erasing 8–9 years of gains against poverty. The officially defined monthly subsistence minimum in the second quarter was 10,800 roubles (about €160) for a working individual and 8,200 roubles (€120) for a pensioner. Rosstat’s income surveys have found that the share of households with children of all households living below the subsistence level had increased to 63–64 % in recent years (36 % of households surveyed).
People living below the official minimum subsistence level
Source: Rosstat.