How the purchasing power of citizens has changed
When they ask what is happening with our economy, they usually give figures on the dynamics of gross domestic product (GDP). But for many, these pros and cons for some percentages, or even tenths of a percent, are not very clear. People are interested in what is happening with prices, wages, incomes, and not all these not very clear and felt fluctuations in GDP. And prices are of interest primarily because to understand whether it will be possible to continue buying certain goods or whether you will have to adjust your consumer behavior.
No, really, can a simple layman be interested in the fact that, for example, GDP will grow in 2023, as it was almost officially announced, by 2 or even 2.5 percent?
Economists (in particular, the author of these lines), of course, are interested in this, and even very much so. But I think that not all of us are engaged in macroeconomics (and GDP is exactly what it is), there are many other equally important and interesting activities. By the way, GDP, according to the definition of Rosstat, is a general indicator of the country's economic activity. At the production stage, it is the sum of the value added of economic activities at basic prices and net taxes on products. And at the stage of use — the cost of goods and services intended for final consumption, accumulation and export. Well, what did I say? Not very interesting and not entirely clear… I'm afraid if I give such a pseudo-scientific definition again, then for many readers, acquaintance with this column will end there.
Therefore, I turn to a more visual way to assess how successfully our economy is developing. There is such an official statistical indicator as the purchasing power of the average per capita monetary income of the population. This indicator reflects the potential for the acquisition of goods and services and is expressed through the commodity equivalent of just the average per capita cash income. But the commodity equivalent is understood as the amount of any one product (service) with specific consumer properties, which can be purchased on the condition that the entire amount of cash income will be directed only for these purposes. What is the average per capita cash income, I think, is clear: you just need to divide the total amount of cash income of the population by its population.
So let's see how much, for example, meat could be bought with the average per capita cash income of the population in the first quarter of 2023 compared to what it was in the first quarter of 2013. Let's compare and see what changes have taken place here over the past 10 years. Undoubtedly, the monetary incomes of citizens have grown over the years, but so have the prices of various products. For reference: if in the 1st quarter of 2013 the average per capita monetary income of the population was, according to Rosstat, 21,800 rubles per month, then in the 1st quarter of 2023 they were equal to 44,937 rubles per month.
We take only official, Rosstat information, which includes the necessary data on twenty-four representative products. So, in 2023, per capita cash income per month could buy 81.4 kg of beef (except for boneless meat), while in 2013 the purchasing power of income was 87.9 kg of beef. It turns out that after 10 years of beef, we can buy less with our income. But pork is more: 130.4 kg in 2023 and only 101.2 kg in 2013. Lamb, by the way, is practically unchanged: now — 72.8 kg, a decade ago — 72.1 kg.
But frozen fish (except for salmon species and fish fillet) today we are able to buy much less, than it was 10 years ago: 164.4 kg in 2023, and in 2013 214.2 kg. I think it is clear even without this official statistics that the purchasing power, measured by fish, has declined in recent years, because it is obvious how much the prices of fish have increased. No salaries could keep up with the «fishy» dynamics.
For drinking milk: 466.4 liters can be bought in 2023, and in 2013 it was 550.4 liters. The situation today is also clearly worse than it was 10 years ago. We look at chicken eggs: 4737 pieces in 2023 and 4993 pieces in 2013. And again, the situation today is losing compared to 2013.
But the biggest difference is not in favor of 2023 in terms of butter: now per capita monthly cash income can buy 47.5 kg, and in 2013 82.9 kg. That is, today with our income we can buy butter almost 2 times less than 10 years ago. Less margarine, less granulated sugar, less long leaf black tea, less potatoes, less onion, less bread, less vermicelli.
Of the 24 representative goods, the purchasing power of the average per capita cash income of the population decreased in 16 positions. But for the sake of objectivity, it should be noted that in addition to the mentioned pork and lamb, the following became more affordable: chilled and frozen chickens — 228.6 kg in 2023 against 192 kg in 2013. Sunflower oil — 303.1 l and 278.1 l. White cabbage — 1543.5 kg and 1163.9 kg, respectively. Carrots and apples have also become more affordable.
Well, the greatest progress is noted in table salt: in 2023, 2179.9 kg (that is, more than 2 tons) can be purchased for average per capita income, while in 2013 — 1561.6 kg (that is, a little more than one and a half tons). It turns out that in 10 years the purchasing power for salt has increased by 40%! Here it is — the leading product and a reason for optimism. But why do we need so many tons of salt?
Now some conclusions: what do we do with all this? But first, let's fix: the purchasing power of the average per capita cash income of citizens in 2013-2023 (in the first quarter) decreased for 2/3 of the goods, that is, for the clear majority of representative goods. GDP over the years, by the way, grew quite modestly, but grew: by about 8-9%. Here is clear evidence: GDP, which everyone reports to, has become larger over the years, while purchasing power for most goods has decreased.
GDP is, of course, an important macroeconomic indicator, but with its drawbacks. However, I'm not going to criticize him. We just have to admit that nothing better than this from the point of view of a generalizing indicator for the economy as a whole has yet been invented. But we must also recognize that when we assess how things are going in the economy, we must not forget about other quite official indicators that give a more accurate and visual representation of what is happening in terms of the interests and needs of ordinary people. If we look at these other indicators today, including those that characterize the purchasing power of citizens' average per capita incomes, then we simply have to state that there is no socioeconomic idyll. Everything is very, very ambiguous. Salt, of course, today we can buy much more per capita cash income, but less sugar …