Growth of Real Personal Income Down
The growth rate of real disposable personal income slowed in the first quarter of the year to 3 percent per month, the Ministry of Economic Development and Trade noted in a report published yesterday. Inflations, lower income from bank deposits and higher interest payment on loans influenced real personal income. The tendency will continue unless inflation is reeled in.
Nominally, the volume of personal incomes in the first quarter totaled 5.3 trillion rubles, up 25.9 percent over the same period last year. Expenses were up 27 percent to 5.4 trillion rubles, 148 billion rubles over income. The higher figure for expenses than income was explained as a seasonal factor related to the lengthy holidays. Real disposable personal income grew by 2.8-3.3 percent per month.
Most of the public's income comes from salaries and pensions. According to the Economics Ministry, real wages in the first quarter “were characterized by a tendency toward acceleration,” rising 14 percent in March. Pensions are indexed to inflation. Economists attributed the lower levels of real income to lower interest paid on savings in rubles and lower income from property, that is, from rental of housing. Stock dividends and income from government bonds continued to rise. Meanwhile, the public paid 2 percent of its disposable income, more than 400 billion rubles, on interest payments in 2007, up from 1.4 percent in 2006. With consumer crediting growing continually, that figure will continue to rise.
Economists note that, since personal income is growing faster than the GDP and productivity of labor, a slowdown in income growth was to be expected. Future tendencies depend on inflation and, even more, on inflationary expectations.
www.kommersant.com
All the Article in Russian as of Apr. 30, 2008
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