the Citizens are losing income and the rest.
In the second quarter of 2020 with regard to the existing package of government measures to support the economy, incomes will decline at an annual rate of 20%. Household spending in April was supported by savings — but in the last week of the month, they decreased and anxiety due the state of the labour market has increased dramatically. Against the background of increasing numbers of people who have lost part of the salary or sent to unpaid leave, a small business in April has lost more than half of the revenue that threatens to make the share of income from entrepreneurship incomes very low.
Examining the measures of state support of the economy and the results of recent surveys of companies and citizens, conducted in April, five leading sociological companies, economists development Center of the HSE estimated in the second quarter of 2020, real income will amount to 78.2% of the level of the second quarter of 2019, while the state support will be able to mitigate this decline by only 2.2 percentage points (PP).
These assumptions are far from the data of the latest survey on inflation expectations index and consumer sentiment of the citizens of the FOM for the CBA, which was conducted 16-24 April.
Recall that the consumer price inflation in April accelerated to 3.1% from 2.5% in March. In the CBA “cautiously suggesting” stabilization of inflation expectations after their growth according to the results of previous studies, but pointed to gains proinflationary factors, expecting the stabilization of inflation only in the middle of the year. While the economy in the may picture of inflation notes that of influencing the index potreban “restrictions as demand side (self-isolation) and on the supply side (the work stoppage)” the likely strengthening of the second factor, it is after the lifting of restrictions could continue to increase inflation and reduce real income.
According to FOM, the deterioration of the material provisions of the said 42% of respondents, which is 6 percentage points higher than at the beginning of the month.
This is confirmed by the actual data of the savings Bank, according to which for the week 20-26 APR expenses decreased by 2.3% (16.5% in annual terms), although in the first and second week of April grew. At the end of March and in April to support spending citizens allowed savings.
In the first quarter, according to the Central Bank, the savings rate fell to 6.3% on a seasonally adjusted basis (in the fourth quarter of 2019 — 12%), mainly due to “the outflow of foreign exchange deposits due reduce their attractiveness.” Almost every fourth Respondent have to spend savings to cover expenses, and 5% for the last two weeks has lost them altogether. 15% of Russians over the last two weeks borrowed, 5% applied for the loan and 1% for the microcredit��m, three quarters of which was spent on current expenditures, although almost every second already have outstanding loans, and payments on them were the main reason for the decline in real incomes in the first quarter of 2020 (see “Kommersant” on April 27). The Central Bank noted that already “a third of borrowers included in the risk group due significant reduction or complete loss of income.”
FOM captures the decline in the percentage employed from 27% to 24% and increase the share of those who call themselves unemployed, with 4% to 6%.
there is a growing uncertainty and expectations is confirmed by the assessment says, which in March—April, sharply increased public concerns about situation on the labour market: the index of disturbance (changes from 0 to 100, reflects the queries in Google about unemployment benefits for her labor exchange, telework) reached a five-year maximum.
Note that on the background of deterioration of the employed data it company “Motor” (more than 650 thousand online ticket office around the country) show that in April the turnover of small and medium enterprises (SMEs) fell by 54% compared to the same period of 2019.
“According to Rosstat estimates, about 20% of GDP is created by small and medium enterprises. Catastrophic scenario of reducing turnover by 50-60% in the SME sector may lead to a reduction in GDP of about 10% in the second quarter of 2020”, — noted the experts of the Gaidar Institute. Income from entrepreneurship, which share in the structure of incomes in the first quarter of 2020 have dropped below 6%, will be quite insignificant.
Alexey Shapovalov
