Alexey Vedev named possible reasons for the growth of household incomes

According to Rosstat's operational data, in 2023 the average monthly nominal income amounted to Rb50,265. Nominal income increased by 10.9% compared to last year. Inflation-adjusted real income was up 4.6%, while disposable income, which takes into account mandatory payments, increased by 5.4%. These figures are closely linked to the key macroeconomic indicator, GDP, which grew by 3.6% over the past 12 months, exceeding the expected forecasts of the agencies. This positive performance is the highest since 2021, when GDP grew by 5.9% on the back of a low base of pandemic 2022.

"Generally, in 2023, everyone expected a drop in economic activity and personal income, especially in Q4. In the end, everything happened exactly the opposite," Dr. Vedev recalled. It is difficult for me to judge how accurate Rosstat's estimates are, but it is clear that the dynamics of income growth is due to several reasons. Firstly, indexation of social benefits, and secondly, the forced necessity to raise wages due to the shortage of labor".

According to the expert, the key question that the answer to which will determine the situation with income in 2024 is: will the economy be able to continue to maintain 3.6% growth rate or will it face stagnation (growth of less than 1.5%)? Dr. Vedev considers the second scenario more likely. "Due to the fact that high interest rates slow down credit activity in almost all sectors, the mortgage market is rapidly deteriorating," the expert summarized.