Why produce something if there is no one to buy?

The risk of process of falling of real incomes of the population and subsequent decline in demand begins to show stronger and stronger. If the previous few years, the situation was smoothed out due to the growth of consumer lending by the end of 2019, the debt load of the population has so increased that now they are starting to pull demand down. All the money people give not for the purchase of goods and payment obligations on loans. And so how to buy becomes nobody, and the producers there is a natural problem.

As reported by Vedomosti, the index of business activity in Russia fell to the lowest since 2009. This is directly related to the decline in the purchasing power of Russians and demand for goods and services. Huge amounts of citizens are forced to pay to pay for the loans they acquired in order to maintain their standard of living in the years 2014-2018. I must say that someone in the government had predicted such a situation. And that someone is none other than the Minister of economic development Maxim Oreshkin. What are the consequences? It’s very simple.

Retail sales in the networks continue to fall. Accordingly, producers have no choice but to cut production. The result is the trampling of the economy in the backdrop of soaring revenues (due to bathing in the money of the mining and financial sector). To understand logic of actions of the government in such conditions is almost impossible. Incomes are not interested in it, with a huge budget surplus it thinks how to increase his income and reduce costs, it is afraid to make changes in the tax laws more equitable taxation, but easily increases the taxes on the population, raises the retirement age. The logic in all this seems only the case that preparing some very apocalyptic scenario with full isolation of the country from foreign markets. Something else is happening is difficult to explain.

Lessons postcyclone stagnation show that the current leadership of the country does not set itself development goals. Everything is done as being very conservative and careful, every penny from the budget to the needs of the community are given with great reluctance, whereas in superstroke as well as huge projects of oil and gas industry budget investment flow like water. Why is this happening? Even further personal enrichment of the top to explain the government’s actions is obtained with difficulty.

Remains only hope that the thought of further confrontation with the rest of the world is nothing more than assumptions and such assumptions will remain. And the current socio-economic policy is thus exclusively due to the incompetence of the government. With the falling demand for goods and the lack of money is no economic breakthrough, which likes to say the President, can not be achieved. Therefore, the economic stagnation in the build-up of reserves will remain the primary target model for the government. And national projects with breakthrough development for the purpose of hanging noodles on the ears. All as always.

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