Rosstat recorded the first rise in Russian real disposable income in January since October 2014. However, Rosstat went on to say that the bump was caused by a one-time payment to pensioners of RUB5000 (€81.69) in lieu of indexing their pensions at above the rate of inflation.

The real disposable income rose by 8.1% in January year-on-year after falling every month for over two years. The number is important as it is a more accurate reflection of the spending power of the Russian consumer and contacted by between 4% and 8.3% every month last year.

Nominal wages contracted by 5.9% in 2016, but as inflation dropped below 6% at the same time real wages (ie nominal income minus inflation) was flat, and even gained a little at the end of the year. The difference between real incomes and real disposable income is the latter is what is left over from real incomes after spending on food and utilities is subtracted out.

Thanks to the success of the Central Bank of Russia (CBR) in fighting inflation in 2016 real incomes have already gone back into the black and are expected to continue to rise this year. However, there will be little to no impact on consumption until the all-important disposable component goes into the black as well; given that January’s positive result was an anomaly, real disposable incomes are expected to start contracting again in February, although the trend is clearly improving.

The pensioners windfall increased the nominal size of the average Russian income by 12.5% m/m in January 2017, to RUB24,225 (€396).

At the same time, the nominal size of the average wage in Russia in January 2017 increased by 8.3% (to RUB35,650). Real wages of the average Russian increased by only 3.1%.

 According to the Federal State Statistics Service, in January-September 20.3mn Russians were living below the poverty line, or 13.9% of the population.