An economic study undertaken by Russian specialists predicted that as social disparity rises in the upcoming years due to sanctions against Moscow and constrained growth potential, the size of the middle class in Russia will decrease.
This week’s report, from researchers at Moscow’s Higher School of Economics, one of Russia’s top academic institutions, outlines four potential scenarios for how Russians’ living standards would develop between now and 2030.
According to the study, which is based on a survey of experts from economic institutions, businesses, and government agencies conducted in 2022, only a combination of global economic growth and a relaxation of Western sanctions against Russia over what Moscow refers to as its “special military operation” in Ukraine will increase real incomes and lower poverty.
According to the analysis, even if sanctions pressure is lessened, the middle class will still be hurt.
A return to pre-conflict levels of prosperity may be far off as more government expenditure is going towards the military, but Russia’s economy surprised observers last year by demonstrating remarkable resilience in the face of harsh Western sanctions.
According to the study’s most optimistic scenario, real incomes would rise by almost 2% above 2021 levels in 2030 and the poverty rate would decrease to below 10% from 11.8% in 2022. In that scenario, the middle class’ size will continue decrease from the present predictions of 20%–50% to 14%–31% by 2030.
So, even in the most favorable development of circumstances, one might anticipate the middle class and the population’s social and psychological well-being declining.
Under the worst-case scenarios, real wages eventually decline up until 2030 and poverty levels approach 20%.
The authors predict that there will be “a shrinkage of inequality below through the convergence of the middle (or formerly middle) strata with the poor, on the one hand, and a growth in the concentration of wealth and a further breakaway at the ‘top’.”
According to the study, rising societal tensions could result from growing inequality in each of the four scenarios. According to all four scenarios, an increasing number of security officers will enter the middle class.