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By: Bloomberg News Published on Tue Jan 20 2015
More than half of Russians can?t afford to buy anything other than the basic necessities, the highest level in five years, a study showed.
Fifty-four per cent of Russians suffer from economic deprivation, up from 46 per cent in 2013, the survey by the Moscow-based Financial University found. The indicator last reached that level in 2010, a year after it hit a peak of 61 percent as the country?s economy contracted by almost eight per cent in the global financial crisis.
Russia, hit by a combination of plunging oil prices and sanctions imposed by the U.S. and the European Union over the Ukraine conflict, is heading into recession this year. President Vladimir Putin warned last month the downturn may last two years and Economy Minister Alexei Ulyukayev is predicting a 4 per cent to 5 per cent contraction in 2015 if the price of crude oil stays at about $45 a barrel. Inflation reached 11.4 per cent in December, the most among the world?s 10-biggest economies.
?The question of poverty has a major socio-political significance because of the risk of social unrest if citizens? living standards decline,? according to the report.
The increase in deprivation during the last economic downturn was a factor that helped to provoke the biggest protests of Putin?s 15-year-rule in late 2011, the report said. In particular, the growing numbers of disadvantaged youth with few job prospects represent a threat just like during the 2011 Arab Spring revolutions that toppled the leaders of Tunisia, Egypt, Libya and Yemen, the Financial University said.
Among 35 Russian cities with more than 500,000 inhabitants surveyed for the report, the poorest were all in the central Volga region: Togliatti, home to AvtoVAZ, the country?s largest carmaker, Astrakhan, Penza, Volgograd and Saratov.
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