RUSSIALINK: “Russian Savings Jump During Coronavirus Crisis” – Moscow Times

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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.Central Bank of Russia file photo

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.