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What answer the government on the economic challenges of 2019

Чем ответит государство на экономические вызовы 2019 года

The General opinion of government officials and independent economists, the Russian economy and we can have a very difficult year. According to various forecasts, prices will rise stronger income increase will cease (although it almost did not start), the ruble will continue to weaken. Not excluded the new coils of the sanctions war. The answer to these challenges the government?

Against the background of rising VAT from 18% to 20% from 1 January 2019, the price hike of utility tariffs and public transport (in the new year we are waiting for another price increase) while there is one relatively bright economic news. The minimum wage (SMIC) in the country increased to 11 280 rubles and equal to the subsistence minimum of able-bodied population for the II quarter of 2018. Raising the minimum wage will affect the 3.7 million workers. Where and how can you live on 11 280 rubles a month — a separate issue.

The Minister of labour and social protection Maxim Topilin in an interview to “Rossiyskaya Gazeta” said on increasing salaries of public sector employees in 2019. However, the problem is that this indexing will happen only on 1 October 2019 and only 4.3% to the annual inflation rate 2018. To keep the ratio of the average wage with the salary of teachers, physicians, scientists and social workers, regions will allocate additional 100 million rubles.

The most dramatic increase in the price (obviously more than 4%) the government itself predicts for the first half of 2019. I mean, this whole October indexation of public sector wages is guaranteed to be “eaten” inflation jumps in advance.

Summing up the work of the government in 2018, Prime Minister Dmitry Medvedev announced the availability of the Cabinet of Ministers of a plan of fight against poverty, however, did not mention any details. Meanwhile, it is the growing problem of poverty has become one of the most painful for the Russian economy. While the government stubbornly keeps talking about record low unemployment, even a significant portion of employed Russians barely make end meet. From November 2014 to January 2018 with no breaks was a constant fall in real incomes. During this time, the Russians lost an average of 10-15% of their income. The number living below the official poverty level, according to Rosstat, more than 19 million people. However, even in 2018 — a relatively prosperous for our economy — the income of Russians has not increased. Despite the low base effect: we are talking about the drop in 2014-2017-m, which could grow revenues in 2018. According to the estimates of the accounting chamber, the growth of real incomes of Russians in 2018 not exceeded the symbolic 0,4%.

The list of main troubles that await us and our wallets in 2019, is well known: the increase in VAT, petrol prices, excise duties, utilization fee on cars, higher prices of utility services and public transport.

It is impossible to ignore the sword of Damocles of new sanctions. Although January 8, Democrats blocked a U.S. Senate bill, which provides for the imposition of sanctions against Russia, Syria and Iran, to deceive ourselves on this account is not worth it. The Democrats are not against sanctions per se. They just temporarily refused to support bills that are not related to the shutdown of the U.S. government. As you know, now trump has suspended work of the government (announced the so-called “shutdown”), seeking from Congress for the allocation in the budget-2019 appropriation for the construction of the wall with Mexico. This problem would be solved, and to discuss anti-Russian sanctions in the US will return.

As the Russian government in these conditions is to ensure economic growth, increase investments, create new jobs and give the possibility to create a private business? While there is a sense that we can soon expect a new “statistical tricks” and not real economic breakthrough. Immediately after a given correspondent “Газеты.Ru” the President at the final press conference of the question of the reliability of economic statistics was a change of the head of Rosstat — Anatoly Surinov was replaced by Pavel Malkov. And that’s the first thing the new head of the Agency “dramatically improved” in hindsight the statistics for previous years.

Rosstat immediately after the change of the head office, 29 December 2018, has suddenly raised its estimate of GDP growth in 2017 and 2016. Assessment of GDP growth in 2017 has been improved from 1.5 to 1.6%. Moreover, after the translation, the staff determined that in 2016, Russia’s GDP grew by 0.3% and fell 0.2%, as reported by statistics before.

These “drawing lessons” just not the way to economic recovery. People in General, “the drum” official statistics of economic growth — it is much more important than their personal financial well-being, the presence of permanent employment and sources of income to make ends meet. All 2018 officials told us about the “record” growth in real wages, and in the end of the year were forced to recognize that the incomes of Russians again failed to rise.

Before talking about the economic and technological breakthrough — such task was put in the may decree of the President as the main development goal of the country until 2024 the government to begin to give people hope, to change the mood of Russians. If, as said by Prime Minister Dmitry Medvedev, has a plan to fight poverty — it needs to be disclosed and carefully explained to the community. Neither the world Cup nor before the Sochi Olympics did not lead to economic recovery in Russia. Similar-scale events in the foreseeable future, Russia should not wait. So it is necessary to look for new sources of growth, to invest in infrastructure development, including the digital economy, in the development of education.

The task of the government is to give people a feeling of the chance though as-that to plan for the future. The mantra of officials on the successful adaptation of our economy to the sanctions, as a return for the first time since 2011 to a surplus budget citizens is clearly not comforting. To reverse the massive pessimism of the Russians against the country’s economic future — that’s the main goal of the Cabinet of Ministers for the year 2019. Constantly explain economic stagnation and the deterioration of people’s lives sanctions or the problems of the world economy will not work. Otherwise people will start a mass order to try to survive without “state” as best I can.

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