Russia is in a Recession, but Russians are Satisfied with Everything

October 14, 2013

Interfax has published an article suggesting that despite the fact that the Russian economy could be sliding into recession, the Russian people are generally more upbeat about the situation. The cite a study done by the Russian Public Opinion Research Center (VCIOM). However, looking at VCIOM’s latest data from September (see graph below) it is clear that the data is more mixed than Interfax suggests below. – Ed.
Index of social moods

Courtesy of Finmarket

Russians take the harsh economic reality with surprising optimism. Polls conducted by the Russian Public Opinion Research Center (VCIOM), indicate a positive trend in terms of how the population evaluates the situation in the country as a whole and in the lives of everyone in particular.

The Russian economy is stagnating, the government is desperately searching for sources of revenue for the state budget, cutting the sensitive expenditure items and hastily rewriting the pension reform in order to save some money. Experts do not rule out that the economy can slip into stagnation.

Against this background, opinion polls show that the public gives a more positive assessment of the situation in the country as a whole, as well as on a personal level. The results of a VCIOM opinion poll, which calculated indices of the perceptions about the situation in the country and in personal life, based on the responses, should cheer up the downhearted government.

Thus, in September the index of perception of the situation in the country was already 38 points (up from 35 points in June). A year ago this number was much lower – 28 points (the index is calculated as the difference between positive and negative average ratings).

The higher the index value, the better the Russians think of the situation. The indicator can range from -100 to 100.

The index that measures the perception of the situation in the regions shows even more positive dynamics (from 33 to 39 points). Last year in September, it was 34 points.

Most markedly increased the index assessing the situation at the local level (city/village): since June its value has increased from 31 to 38 points. In the fall of last year the number was 29 points.

As for the index that records the situation in terms of the life of friends and relatives of the respondents, it has also strengthened: the index rose from 67 to 70 points. Compared to last fall, it’s an increase of only 3 points.

Respondents also assess their own lives slightly better. That index increased from 66 to 68 points.

The government statistics, that many consider not always precise, to put it mildly, contradicts the results of the polls. This time, it gave the government a bitter pill to swallow. The consumer confidence index, that reflects the cumulative consumer expectations of the population in the third quarter of 2013, went down 1 percentage point (pp) to minus 7% compared to minus 6% in the second quarter of this year, according to the Federal State Statistics Service.

And the decline in consumer confidence was due to the negative dynamics of all its components. A worsening of the subjective perceptions of the public about the past and expected changes in the Russian economy have had the greatest impact.