Putin orders to change situation with incomes of Russians

Putin orders to change situation with incomes of Russians

Russian President Vladimir Putin, speaking at the Russia Calling! investment forum, urged the government to make a difference to real income movement in Russia. According to the head of state, it is the most important task for the ministers.

"Today, wages in Russia are growing both in nominal and in real terms," but "disposable incomes of citizens practically stand still," he said. This situation needs to be changed, Putin emphasized.

"In spite of a decrease of the global growth rate, Russia retains positive economic dynamics. Last year, the gross domestic product (GDP) growth amounted to 2.3%. It was more modest in the first three quarters of this year, we know quite well, 1.1%," the head of state said.

The president said that Russia needs to rise labor productivity significantly. "The Russian government, the business community need to attain dramatic changes in the increase of the labor productivity based on advanced technologies, growth of qualification and new competences," 

He said that budget spending meets the plan more than spending on the national projects, this is a concern which the government must address.

Putin also noted that Russia will not use its National Wealth Fund to finance oil and gas projects. 

In addition, Putin noted that the too fast fall of inflation creates risks for Russia's economy. Russia's inflation is declining faster than expected, at the beginning of next year "annual inflation could slow down to 3% and even lower," he did not rule out.

The Kremlin will keep the issue of inflation "under constant supervision", and will follow up on this issue with the government and the Central Bank on this issue, the head of state noted.

The vice-rector of the Academy of Labour and Social Relations Alexander Safonov, speaking to Vestnik Kavkaza, listed the reasons why the disposable income of Russians so not change, despite the increase in salaries. "First, salaries are mainly increased in those sectors that are linked to the foreign market - the mining system. They were partially increased in the public sector due to the execution of the May decrees. But at the same time, income from citizens' property declines due to the economic situation in the country," he said.

"Revenues from financial assets are reduced because the Central Bank lowers the key rate, due to which banks lower their deposit rates. Another problem is that the social protection system does not present a sufficient level of income for the most vulnerable citizens," Alexander Safonov noted.

The vice-rector of the Academy of Labour and Social Relations stressed that the government has tools to ensure the growth of incomes of Russians. "One of these tools is the growth of the minimum wage. The second direction is the introduction of a progressive income tax," the economist said.

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