RUSSIALINK: “Russian Savings Jump During Coronavirus Crisis” – Moscow Times
As wages fell and unemployment rose, Russians saved almost one in every four rubles throughout the pandemic.
(Moscow Times – themoscowtimes.com – July 29, 2020)
Russian households saved almost a quarter of their disposable income during the height of the coronavirus pandemic, the Central Bank has said in a new report.
Despite a rise in unemployment and a fall in wages, Russia’s household savings rate rose to a record 23% in the second quarter of 2020 – more than double the typical level of 8-11%, Central Bank analysts said.
The report noted that the jump in savings is unlikely to be sustained as it “largely reflects consumption restrictions during the period of self-isolation and the suspension of travel.” In other words, with businesses, shops and restaurants closed for much of the quarter and Russians forced to stay home in a strict nationwide lockdown, there were fewer opportunities to spend.
But the increase in savings could also reflect apprehension about economic prospects and the desire to save for future hardship. A survey by the Higher School of Economics (HSE) found that more than four in 10 Russians said their personal financial situation has deteriorated during the pandemic. Only 10% predicted their financial wellbeing would improve in the foreseeable future.
Overall, disposable incomes fell by 8% in the second quarter compared to 2019 levels, the Central Bank reported. That decline was cushioned by 800 billion rubles ($11 billion) in government handouts – largely to medical professionals and families with children – which accounted for 6% of all household income across the quarter.