This will quicken final consumption and will provide additional impetus to GDP growth
Photo: urban news Agency “Moscow”
Dollar incomes of Russians will increase by almost a quarter by the end of 2018 to an average of $674. Financial analysts believe that the increase in disposable income in the currency and a departure from savings behaviors will boost the capacity of consumption in the country and push the economy to growth. First of all, will benefit tourism and trade of durable goods.
The improvement of the economic situation in the country and the strengthening of the ruble to the dollar will lead to the fact that less than two years dollar nominal income of the population of Russia will increase by 23% and reached an average of $674. This forecast is contained in the study “economic Outlook in Russia to 2017” prepared by the PSB. Now the average Russian earns $548.
Analysts at credit organizations are sure that the revenue growth denominated in foreign currency and change of behavioral patterns of the population from savings to consuming will give an extra incentive to increase consumption in the country and encourage domestic GDP growth.
— Consumption growth and reducing the propensity to savings traditionally happen as recovery. The improvement in the labor market and improved confidence in future income stimulate citizens to become more active purchases of expensive goods, — told “Izvestia” one of the study’s authors, chief analyst at Promsvyazbank (PSB) Dmitry Monastyrshin.
It is estimated that household consumption will provide up to 3.6 percentage points of GDP growth this year. In particular, according to him, the growth of dollar income will have a positive impact on the dynamics of tourism and trade of durable goods — cars and other. According to the official forecasts of Ministry of economic development, the Russian economy will increase in 2017 by 0.6%.
The income growth in dollar terms is already happening and may continue in the future, I’m sure the Director of strategy SMP Bank Alexey Ilyushchenko. This is due to the high oil prices and the interest of foreign investors to Russian assets.
— Under our baseline forecast, we start from a moderately positive scenario of the situation and believe that oil prices will show a moderate positive trend in the period from 2017 to 2019. We also forecast GDP growth of around 2% annually. This will affect the incomes in the national currency. We believe that growth in dollar revenues is quite possible, — said Alexey Ilyushchenko.
Senior researcher, research laboratory of standard of living and social protection Institute for social analysis and forecasting Ranhigs Alexander Burdiak indicated that the growth of ruble and dollar incomes possible through the development of investment, job creation and targeted support of effective demand for goods of its own production.
Growth would restore the standard of living of the population at least to the bar in 2013. But it needs a lot of work — said the expert.
Due to the fact that nominal wages denominated in rubles, will rise a more modest pace compared to the dollar (just 11.8% in 2018), foreign currency deposits in Bank accounts will not increase, said Dmitry Monastyrshin of PSB.
— It is rather possible to expect preservation of the current level. Ruble deposits look more attractive relative to currency because of higher rates and the strengthening of the ruble. Therefore, the main saving will occur precisely at the expense of rouble deposits, — says the analyst.
The real situation will still depend on the cost of oil, experts warn. A key share of the budget is still generated by oil and gas revenues, and to transform this model in the near future will not succeed.
— If oil prices fall below $45 per barrel, the ruble will fall, because otherwise the authorities will be difficult to maintain profitable part of the budget is in rubles, with declining dollar earnings, — said Aleksey ilyuschenko of SMP Bank.
In the base forecast, the MAYOR said that the real disposable household incomes this year will come in the area of positive values, an increase of 0.2% compared to last year. Based on this, the final consumption expenditure in 2017, will not be reduced, and 2018 will increase by 0.3%. In 2019, growth is projected at 0.7 percent.