The share of Russian citizens who identify themselves as middle class has dropped over the past two years from 61% of the population in the third quarter of 2014 to 51% in the third quarter of 2016. This was stated in the last issue of the review of consumer confidence in Russia called the “Ivanov Consumer Index,” prepared by Sberbank Investment Research (Analytical Department of Sberbank CIB).
“Thus, starting from the beginning of the economic decline, 14 million people have moved from the middle class to a lower income class as living costs rose faster than wages. This puts pressure on the consumption of goods that do not belong to the category of daily necessities. Nevertheless, we believe that the middle class will cease to reduce further in view of the fact that the wage growth rate will correspond with the level of inflation,” the authors of the review concluded.
Previously, the reduction of the Russian middle class to a mere 15% of the population was predicted by RANHiGS experts (Russian abbreviation for the Russian Academy of National Economy and Public Administration). In a survey that was published in late 2015, these economists found that over the past 15 years, the middle class did not increase in any way and has a tendency to decrease sharply during a crisis. The economists characterised the middle class as being composed of Russians who have a higher education, an income that is not lower than the average salary of the region, as well as personal savings consisting of an amount that is sufficient to buy a car.