Russians’ Real Disposable Incomes Are Falling

From Nezavisimaya gazeta, Sept. 10, 2025, p. 1. Condensed text:

Russians’ real disposable incomes (RDI), i.e., the amount of money left after paying all mandatory and essential expenses, have fallen to an all-time low in recent years, according to the Romir polling agency. Researchers attribute the decline to a surge in spending before the start of the academic year. However, such a fall has not been recorded in previous years. . . .

Household RDI in Russia was down to 14.8% [of total income] in August from 19.8% in July, the researchers say. To compare: Last August, an average Russian family had 20.4% of total income left, while it had almost 27% left in August 2023. The researchers defined RDI as the amount of money left in a household after paying all essential expenses for food, everyday goods, utilities, housing maintenance and other services. RDI is the money that a family can spend on vacations, leisure, entertainment, big-ticket purchases, education, [home] renovation, etc. The RDI index was calculated as the difference between a household’s income and spending on essential goods and services. Average household incomes were determined on the basis of Romir’s and Rosstat’s [Federal Statistics Service] own calculations. Spending on essential goods and services was calculated on the basis of Romir’s Integrated Data Panel. Household income included the combined regular earnings and lump-sum financial inflows of all residents in a household (family) from various sources. Romir’s conclusions were based on consumption data from 40,000 Russian [respondents].

Romir attributes the August decline in Russians’ RDI to “preparations for a new school year and the purchase of all essential supplies for school and college students, which is traditional for that month.” However, this pattern was not observed in 2024. For example, last August, an average Russian family had 20.4% of its total income left compared to 19.3% this past July. Nevertheless, it cannot be ruled out that higher “secondary” expenses were a factor in the decline of household RDI. For instance, the share of RDI fell to 15.5% in December 2024. At the time, experts chalked that up to pre-New Year’s spending.

It should be noted that the share of household RDI is falling amid officially rising incomes and wages. For example, household RDI was up 7.8% year on year in the first half of [2025]. Credited [monthly] wages exceeded 103,000 rubles in June, up 15% in nominal terms and up 5.1% in real terms, year on year. Furthermore, price hikes in the country are slowing down. By late August, the consumer price growth rate in Russia was 8.46%, compared to 8.79% in July.

Citizens’ real weekly spending is falling compared to last year, according to Romir. For the period of Aug. 11-17 alone, the average Russian family spent 8,517 rubles on food and everyday goods. The volume of weekly spending increased by 408 rubles, or 5%, which points to a decline in real spending, adjusted for inflation. According to Sberindex, weekly spending increased between 8.1% and 9.5% in the second half of August. To compare: In 2024, Sberindex recorded an increase in citizens’ weekly spending of 15.3% to 17.6%.

Recent polls by the Public Opinion Foundation [POF] showed a slight worsening in the population’s assessment of its financial status. For instance, in April, 27% of Russians [said they] hoped for an improvement in their status, and in August, only 18% were this optimistic.

Such disturbing changes are also occurring in the group of those who are concerned that their financial status will deteriorate in the future. Such [respondents] accounted for 11% in April and 16% in August. At the same time, the share of Russians who are not expecting any particular economic changes is increasing. In April, the share of such respondents was 38%, and in August 54%, i.e., significantly more than half.

Meanwhile, various survey indicators point to a massive contraction of domestic demand. For example, in its report titled “Regional Economy,” the Central Bank states that from January through August, domestic demand in Russia declined in all sectors except agriculture. Demand has fallen the most in the manufacturing industry, wholesale trade and the construction sector. And consumer demand has fallen to an all-time low since late 2022, [Central Bank chief] Elvira Nabiullina’s agency stressed. In addition, according to the Central Bank, construction companies reported low demand for new housing due to the limited availability of mortgage loan programs. . . .

Market surveys of industry representatives conducted by the Russian Academy of Sciences’ Institute of National Economic Forecasting also point to a further significant decline in business outlook. “Due to the continuing decline in demand, Russian industry is getting used to shrinking sales volumes and increasingly pessimistic forecasts for demand amid excess stocks of finished products,” said economist Sergei Tsukhlo, an author of the survey, commenting on the August assessments of Russian industry. . . .

Some experts do not rule out that such a sharp decrease in the share of RDI could also be linked to an increase in layoffs and a reduction in the total workforce. Indeed, few people are surprised by the fact that several regions have transitioned to a reduced work week or are laying off employees. For instance, regional media outlets, citing Tyumen Province’s Labor and Employment Department, report that almost 700 employees from 31 companies could be laid off in September. The main layoffs are being expected in the woodworking, drilling and transportation sectors. Some of the employees could be transferred to less well-paid positions as part of reorganization programs. The local press is discussing the possibility of phased layoffs of more than 300 employees at a plywood factory in Tyumen Province. Some experts are forecasting that the factory could be completely closed down. The difficult situation in the woodworking industry is being attributed to the Central Bank’s high [key interest] rate and stagnation on the construction market.

In Chelyabinsk Province, the local electrometallurgical plant, including the Serov Ferroalloy Plant, has transferred all its employees to a four-day work week. Plans also called for employees of the Yekaterinburg subway system to be transferred to a reduced workweek.

The share of Russian companies planning to lay off their staff has almost doubled since the beginning of the year, the Central Bank acknowledged. For example, in January, the share of such organizations was 6.9%, and in June it reached 11.5%, according to the bank’s reports. Nabiullina’s agency attributed that to contracting demand for goods. This primarily refers to mining, mechanical engineering and pharmaceuticals. Several companies are already laying off employees, and some companies are transitioning to part-time employment or furloughing employees, the Central Bank reported. Companies’ wage review plans have also become more modest. The share of those who expected a wage increase has fallen from 84% to 71%, and median wage increase expectations were down from 8.4% to 5.3%. This trend is characteristic of all sectors, but especially trade, mining, the chemical industry, construction and agriculture, the Central Bank stressed.

Companies’ demand for employees remains on a downward trend. At the same time, the number of résumés on the Web sites of major vacancy aggregators continues to grow, but more slowly than at the beginning of the year. Specifically, the recruiting service hh.ru [HeadHunter] reported that there were six applicants per job opening in July 2025, whereas there were three the year before.

Experts believe that the declining share of RDI in Russia primarily speaks to the inflation-driven increase in spending on essential goods, utilities, housing maintenance, transit and telecom services at higher rates than the growth of incomes. “Average wage growth rates do not reflect the differentiation in earned income growth rates among different citizens in terms of qualification levels and occupations. It is also important to bear in mind that the indexation of pensions and social benefits takes place at the beginning of the year based on the inflation level in the preceding year. And in the new year, real purchasing power consistently declines due to continuing price growth in the new year. Ditto for the indexation of wages. For example, insurance pensions were indexed from Jan. 1, but that indexation compensated for price rises in 2024. And prices have increased by 8.28% since the beginning of [2025]. This means that purchasing power will decline on average by 8.28% this year,” said Aleksandr Safonov, professor at the [government-affiliated Moscow] Financial University.

“Such a low share of RDI clearly attests to a decreasing level of real well-being relative to rising prices for goods and services. Housing maintenance and utilities tariffs are rising; food products are becoming more expensive; and transit fares are increasing. Many families live from hand to mouth, which does not allow them to save money. And many households are also paying off loans, including at very high interest rates,” stressed Anna Gondusova, head of the product development department at Alfa Capital. . . .