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Russia strangling the credit noose

Россию душит кредитная удавка

In 2019, the real incomes of Russians will continue to fall, despite rising wages. In particular, because of the need to pay interest on loans. As reported TASS, said the Finance Ministry for the project budget for the period 2020-2022 years, which the government submitted to the state Duma.

“In General, the results of current year growth of real gross wages and salaries is projected at 1.5%. At the same time, the dynamics of real disposable income, despite strong wage growth remains negative (minus 1.3% in the first half of 2019) on the backdrop of the increasing negative contribution of obligatory payments, including interest for loans. As a result, the growth of real disposable income at the end of 2019 will remain at the level of the previous year and will amount to 0.1%”, — stated in the materials of the Ministry of Finance.

The Minister of economic development of Russia Maxim Oreshkin said in the summer that the economy of the Russian Federation is the problem of debt load of the population “explode” in 2021.

Thus, according to the Minister, the level of over-indebtedness is not a “bubble” from the point of view of stability of the financial system of the country, and “that he does not burst, it should blow away quietly”. In addition, he reported on the need to develop mechanisms to assist people who cannot service their loans.

At the end of August it became known that the MAYOR has lowered the economic forecast for next year, reducing its estimate of growth in real disposable incomes of Russians in 2019, almost ten times — from 1 to 0.1 percent. On the same day the President of Russia Vladimir Putin at a meeting with the Cabinet of Ministers expressed their dissatisfaction with the fact that the real incomes of Russians grow too slow even with the increase in wages.

This, according to the President, “can not but cause concern.” Putin also noted the unsatisfactory pace of growth of the Russian economy and asked the government to find a solution for a more sustainable and dynamic growth.

In the fall of income is guilty of a combination of factors — a political analyst Ivan Lizan.

— First, the impact of government policy “people — the new oil”: increased tax burden, increased VAT, at the same time improved tax collection from them has become more difficult to evade.

Second, the economy falls, and with it real wages. The reasons for the fall in addition to the structure of the economy and the world market — in a manic desire to financial-economic bloc of the government to fill the Reserve Fund, salt away for a rainy day instead of investing money in the economy.

Thirdly, the population depleted savings, against the background of insufficient wage forced to resort to borrowing to maintain current standards of living.

Fourth, in some cases, authorities would like better, but it turned out as always. Example — implementation of may decrees in the field of medicine. Doctors wages have increased, and nurses turned into the cleaners with wage cuts. The result — hundreds of thousands of professionals reduced wages, which already were small, plus the worse their quality of work, decreased motivation and increased the burden on physicians.

Fifth, the increased level of stratification: if the physician — a salaried Manager salary, relatively, more than 100 thousand roubles, and nurses — part time is 8 thousand rubles, the normal psychological climate is not, and never will be. Growing alienation between people, increases nervousness. One of the ways of its overcoming at the grassroots level — the credit, at first smooths out the drop in income, but in the medium term making things worse.

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“SP”: — All the really bad credits? Why do people take out loans if incomes are falling?

— Incomes fall for the fifth consecutive year. The poor in the country more than 20 million people (more than 13% of the population), in 2018 the Russian Academy of national economy recorded a minimum 15 years, the level of savings among the population. In the past year, the debt of Russians on loans to banks amounted to 21.8% of their cash income for the year, and in January-September of 2018 — a record of 34.3%. The debt load of the population in 2019 to exceed the achieved in 2014, a maximum of 9%.

The level of perekreditovanija higher in the small settlements (less than 10 thousand inhabitants), as well as in the Volga, southern and Siberian Federal districts. In General, at least one of the four signs of perekreditovanija in 2018 had 17% of Russians. If the number of features to remove the subjective component (the perception of payments as a heavy burden), the rate will be reduced to 8%.

I take loans in order to stretch his legs here and now, postponing the collapse for later. Plus loan is not difficult, but for those who do not give credit, it takes pensioners. That is, a loan is a way of temporary escape from poverty.

“SP”: — a salary Increase at 1.5% is a lot or a little?

Is below the level of inflation and other factors that affect prices. But facts are enough: I don’t think the population has recovered from the devaluation of the ruble in 2014/15 Plus salaries, many are still scanty.

“SP”: — Some experts believe that the real incomes of Russians influenced by shared global risks for the Russian economy including the fall in oil prices and the introduction of new sanctions. Is it really so?

— The country has accumulated huge cash reserves, are withdrawn from the economy the money in the Reserve Fund. Sanctions, of course, influence, but their impact in 2014/15 was much higher than it is now. The main reason of deepening poverty, the failures of the financial-economic bloc of the government, not the sanctions with the oil.

“SP”: — How realistic is the situation will develop, with revenues in the foreseeable future? And is it possible to stop the decline?

— Will continue to fall simply because there is nothing in principle in economic management has not changed. People need to give money to: when soldiers raise wages, they immediately turned into a pillar of power, and raised the prestige of military service. Now you need to sharply increase the salaries of health workers, teachers and other categories of public sector employees, the money spent on increasing their salaries, will automatically return to the economy in the form of growing consumption of food and nonfood products. We need to raise pensions — pensioners very low consumption, they buy domestic products and support the demand.

At the same time it would change the psychological state of society: it has lost faith in the future. People want to live “here and now”, and this requires money, which is more than enough.

— The need to repay loans, of course, plays a significant role, but the drop in income boosts also increase other mandatory payments, especially fees for utility services, — said political analyst of the newspaper “2000” Dmitry Galkin.

— In addition, do not forget that self-employed citizens and small entrepreneurs, often forced to curtail their activities due to the fact that the current income is often far below the usual level. The income decline is not caused by any one factor, and the overall state of the economy, and in this regard the high debt load of the population is only one of many manifestations of the developing negative trends.

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“SP”: — the Minister of economic development of Russia Maxim Oreshkin said in the summer that the economy of the Russian Federation is the problem of debt load of the population “explode” in 2021.

— On the one hand, the debt load of the population in Russia is much lower than in many developed countries. On the other — among those who are burdened by large loans, a high proportion of poor people who are not able to serve them and never be able to repay existing debts. Such a high indebtedness of people that the banks generally would not need to provide credit, in my opinion, is the result of a deliberate policy aimed at compensation for loss of income poor people.

Representatives of social groups with low incomes have provided access to credit, which allowed to quickly raise the costs of Russian households. Hard to say, hoped for by the government. Perhaps it was hoped that export earnings will grow, which will allow to increase pensions and to download state orders to industrial enterprises that will increase the wages of their employees. As we know, this did not happen.

So now the Minister of economy frightening economic upheavals in that case, if the banks continue to give loans to representatives of needy social strata. Most likely, such a course can indeed pose a threat to normal functioning of the banking system. However, the rejection of it will cause extremely unpleasant economic and social consequences, as representatives of poor social groups (and they are, in my opinion, at least half of the Russian companies) will be forced to endure a sharp drop in revenues — roughly the same as in 2015.

But then they managed to keep the usual status of consumer loans. What will they do in the current situation is unclear. In addition, the growth of household consumption over the past two years has been one of the main drivers of economic growth. So if consumption falls significantly (and this will happen if the banks reconsider their credit policies), then it negatively affect the overall state of the economy, and without that heavy. Therefore, in contrast to alarming predictions Oreshkina can lead as frightening calculations. To get out of the current situation without shocks, in my opinion, impossible.

“SP”: — But not all take out loans. What will happen to the income of those who live without credit?

— If household consumption falls, the economic situation will worsen, because the other driver of economic growth there is not expected. Accordingly, reduction of income of the overwhelming majority of Russian citizens, as it was in 2015.

“SP”: — But they say that salaries grow as much as 1.5%.

— Of course, most of the workers no increase feel. Don’t forget that Russia continues to increase the inequality in wages between regions and sectors. A rise in wages mainly affects officials, security officers, managers and certain categories of highly qualified specialists. These people are relatively few, most of the employees are in a much more complex situation.

In order to rectify the situation with income, you need to focus on creating jobs in the sphere of industrial production and to significantly increase pension. This will lead to growth in other sectors of the economy, primarily in the area of transport, the retail trade and in services. The government is going to do, because all their spending power on maintaining macroeconomic stability. That, in my opinion, is the best way to lead the country to a social disaster.

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