“We need to achieve tangible results”: Putin announced the need to increase real wages in Russia

In 2022, the dynamics of the Russian economy turned out to be better than many expert forecasts.

On Tuesday, January 17, President Vladimir Putin drew attention to this.

As the head of state recalled, earlier some Russian and foreign experts estimated a possible reduction in GDP at the end of last year in the range from 10 to 20%.

Meanwhile, according to preliminary estimates, the real economic downturn was not so deep.

“In general, a decline of 2.5% is expected for the year, I emphasize that this is for the year as a whole, while already in the III and IV quarters, economic growth was recorded, however, compared with a sharp drop in the II quarter.

Our task is to support and consolidate this positive trend,” Putin said.

While Russia’s GDP still declined in 2022 amid unprecedented external pressure, many industries, such as construction, agriculture, industry and the defense industry, managed to increase output.

Moreover, enterprises were able to create new jobs, which allowed maintaining stability in the labor market, the Russian leader emphasized.

So, according to the latest data from Rosstat, in November 2022, the unemployment rate in the country dropped to 3.7%.

The achieved value was the lowest in recent history.

At the same time, as Putin said, today in some regions and industries there are still problems with part-time employment and low wages.

In this regard, the head of state called on the government of the country, together with the subjects of the federation, to work on correcting this state of affairs.

“The main thing is that we have every opportunity for this: we need to stimulate employment ... to achieve noticeable, tangible results in increasing real wages and improving the well-being of Russian families,” the president added.

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As previously calculated by the Ministry of Economic Development of Russia, in 2022, real money incomes of the population decreased by 2%.

However, already in 2023, the indicator may grow by 2% and will continue to increase over the next few years, the department predicts.

According to Vladimir Putin, the situation with the incomes of Russians will largely depend on the dynamics of inflation.

According to the President, in the whole of 2022, consumer prices for goods and services in the country increased by an average of 11.9%, although initially the government and the Central Bank expected higher values.

According to the Ministry of Economic Development, from January 1 to January 9, 2023, annual inflation slowed down to 11.65%.

At the same time, in the coming months, the indicator will continue to systematically decrease, the authorities are sure.

“In the first quarter, we expect a decrease (inflation. -

) to 5%, and then, in the second quarter, it may even be below 4%.

This is fundamentally important for the real incomes of citizens and for the economy as a whole,” Putin said.

A similar forecast was previously given by the Central Bank.

According to regulator experts, next spring inflation in Russia may indeed temporarily drop below 4%, but by the end of 2023 it will be about 5-7%.

recovery phase

According to Vladimir Putin, 2022 turned out to be a very difficult year for Russia.

Nevertheless, the country managed to cope with the risks quite successfully, many of which were unexpected, the president stressed.  

“We worked, in my opinion, quite worthy ... We went through this forest, not understanding what would happen.

They acted from the wheels, as they say.

And we see 2023 better from the point of view of these risks: technological risks, the same infrastructural ones, have not been overcome.

That is, we understand what is happening and what kind of difficulties we will have.

And of course, if we already understand this, then we must go through this much more efficiently, even than what happened in 2022,” Putin said.

In general, this year may turn out to be more successful for the Russian economy, as the country has already largely adapted to the sanctions pressure.

Georgy Ostapkovich, director of the Center for Market Research at the Institute for Statistical Research and the Economics of Knowledge at the National Research University Higher School of Economics, expressed this point of view in a conversation with RT.

As previously suggested by the Ministry of Economic Development, in 2023 the decline in Russia's GDP should slow down to 0.8%.

At the same time, Ostapkovich does not exclude the possibility of a return to economic growth.

“The economy will look for ways to enter the growth phase, and by the end of the year we can add about 1%.

Of course, given the fall in 2022 by 2.5%, we will still remain in a small minus.

However, it will be possible to return to real growth as early as 2024.

This is an objective reality.

No other country in the world has received so many sanctions yet, but nevertheless we will cope, ”the expert emphasized.

As Artyom Deev, head of the analytical department at AMarkets, suggested in an interview with RT, the return of GDP to growth will be possible if it is possible to increase the production of high value-added products.

According to the expert, the main drivers for the development of the Russian economy in 2023 may be import substitution programs and the defense industry.

“At the same time, inflation will decrease, including due to the contraction of consumer demand.

The fact is that today Russians are increasingly moving towards a savings model of behavior and are starting to spend less, which puts pressure on prices,” Deev added.

At the same time, as the economy revives in Russia, the real incomes of citizens should also begin to recover, experts are sure.

According to Georgy Ostapkovich, the expected increase in business profits will allow companies to hire more people and raise salaries.

Social payments to citizens will also play an important role, the specialist added.

“For a part of the population, more than 20% of the income is made up of various benefits from the state.

Another factor in favor of the growth of real incomes is the increase in the level of knowledge and competencies.

If a person is well educated and has experience, then business will be interested in him and his salary will also be higher.

Therefore, the authorities now need to invest more in human capital,” concluded Ostapkovich.