I have most unpleasant news. And not even one.
“Real disposable incomes of Russian citizens in April, according to preliminary data, decreased by 7.1% compared with last April. “Just from January to April 2016 the income of people in Russia in annual terms decreased by 4.7%”.
“Retail trade turnover in Russia in April 2016 decreased by 4.8% compared to the same period last year”. “In January – April, 2016 retail turnover declined by 5.2%”. “Compared with April 2015 the number of unemployed rose by 2.3%”.
Data from the report of Rosstat.
Who is there to say about the bottom, passed last year? And they’ve been talking about some kind of L-shaped passage of the bottom is achieved when the lowest point and the situation stabilized for a long time with the prerequisites for maintaining the level in the future or to increase.
What the hell kind of stabilization, if we have in April continued to shrink income – that is, all signs of further contraction of the economy and deepening the crisis.
Not in January, when you can reference the holidays, and not in may when again, you can refer to them, and at the same time at the beginning of the summer season, good weather and other natural adversities – and in April!
And for the entire period from January to April also recorded a decline – so, April is not any exception and an anomaly.
And in the March-April growing oil and strengthened the ruble, which logically had a positive impact on the Russian economy. But not affected. Even positive news from the “oil front” did not bring in the Russian economy of recovery, it has provided not only growth, but not even slowed down the fall.
In fact, Russia’s population is getting poorer faster than the decrease in GDP. And most importantly – the rate of decline in income of the population is not slowing, but accelerating: last year revenues declined by 7%, and for the last 4 months – almost 5%.
Why is this happening? Because last year enterprises and organizations tried to “sit out the crisis” due to operational reserves, as well as through the optimization of costs not related to payroll. First and foremost, of course, has reduced the purchase of imported equipment, which rose sharply due to the collapse of the ruble. Postponed the upgrade program, and equipment replacement.
But all that was relatively painless to optimize, optimized in the last year. And the economy did not start to recover, the trade volumes decrease, profits fall. And reserves anymore. And most importantly – there is no certainty that the crisis will end soon.
That is why businesses are gradually moving to reduce payroll spend reductions, shortened work week, send workers on unpaid leave.
And even where cuts have not yet carried out – has frozen the indexation of wages. And as inflation subsides (subsides and marked the Central Bank’s target of 4% out of science fiction, and unscientific) means, even with the persistent real wage income is reduced.
And it only gets worse. Companies will increasingly apply the most painful and radical ways of saving – reduction of staff, closing branches, eliminating unprofitable areas, etc., up to the bankruptcy.
Especially pay attention to the following. If in April, was reduced income of the population and retail trade turnover, this will naturally lead to a decline in the economy in may. Because where, ultimately, businesses to borrow money, if not from retail customers? Who said: “the banks”?
When the key rate of 11% about “occupy the banks” for business development you can forget. Moreover, the economy is reduced and, therefore, the majority of companies their profitability is falling.
A vicious circle – enterprises falling profitability, they are beginning to save on labor costs, declining incomes, the buyers leave less money in the stores, reduced trade, again reduced the turnover of enterprises – and on around the circle.
And one of the reasons for all this (not the only but very important) – high key rate. One of the highest in the world, among other things. And while the key rate will be above 6%, the economy will dry further.
The only question is, will the recession slow down or, on the contrary, to accelerate. Most likely, the decline in GDP will slow down, and falling incomes of the population will accelerate. Because the “raw” portion of GDP will remain unchanged (unless, of course, oil will not become cheaper again) and all the reductions will have on “non-oil” part.
And now, perhaps, the most interesting question: how long will it last?
In may, we again will receive a reduction in income and retail trade as a result of the April cuts. In June, too. And while the key rate remains above 6% – the situation will be played. This does not mean that by lowering key rates immediately begin to rise, because there is still a lot of conditions and factors. But while the key rate above 6% – the economic recovery will not be exact.
And when the Central Bank promises to lower the key rate? Elvira refers to the risk of inflation and macroeconomic stability. The Central Bank aimed to lower inflation to 4%, which looks like an unscientific fantasy because never has such a measure by the Russian authorities to achieve was not possible. As far as can be judged by the actions of the Central Bank, he hopes to beat inflation by creating artificial shortage of money. On the principle of “no money – no problem”.
Is this correct and what will – a separate conversation. One thing is clear – as long as inflation does not decrease at least 5%, the key rate is 6% we will not see. Because right now inflation in annual expression according to official data at the level of 7%, and the rate is still the same – 11%. And the fact that the Central Bank still has not made even a symbolic rate cut, doubt that we will see 6% at least to the end of the year.
So, this year, revenues will decline further, and retail sales after them. And the economy will dry still. And neither of which passed the bottom is out of the question. All that was said about passing the bottom last year – a figure of speech that has nothing to do with reality.
If the Russian economy has passed some kind of bottom, it was a local bottom, such as bottom oil prices. Or the bottom of the income Rosneft. Or some other sort of small-town the bottom.
The Russian economy continues to “grow down”. And most worryingly, the income of the population “grow down” even faster than the economy as a whole. With the prospect of acceleration.
So get ready as much as they can, plant your potatoes. It would be better, of course, plant potatoes, and the United Russia party, which set the course for the whole country – and not in the seats of deputies, and in alternative places of comfort with heavy guard. But this still can only dream of, so it is available for planting – potatoes. The mineral resource in Russia, which, apparently, will continue to be all the more useful and more useful.
Alexander Rusin
