08.05.09

Russians have started to view the current state of the economy in a more optimistic light in April compared to March. According to a recent poll, the portion of Russians who are certain that “everything is fine” grew 10%, to 51%.

27% of those polled are expecting “a change for the better” compared to 20% who expect the situation to become worse. More and more Russians think that the crisis is an occasion to mobilize and become more active. The stabilization of the ruble’s exchange rate, authorities’ claims that the crisis has bottomed out, and the rise in the price of oil have fostered Russians’ enthusiasm.

Citizens’ positive mood, experts note, may actually revive the economy.

In March, public officials and economists widely voiced their opinions that the lowest point of the crisis had supposedly already been reached. Indeed, the ruble’s exchange rate stabilized and had even begun to strengthen. Aleksei Ulyukaev, Deputy Chairman of the Central Bank, called for the population to stop buying foreign currency, while the unemployment rate began to slow.

All of this could not help but give rise to some optimism. According to the data, of the All-Russia Public Opinion Research Center (VTsIOM), only 9% believe that “everything is terrible.” Citizens have started to report more often that “everything is ok” (39% in April compared to 29% in March.) Finally, according to 6% of Russians, the economy is good or even excellent (whereas in March it was 2%.)

Residents of small cities and villages more often than others tend to consider the situation in the country to be like normal (43-45%), but respondents living in Moscow, St. Petersburg and other urban areas are, on the contrary, inclined to give more pessimistic evaluations (57% and 62%, respectively). In the provinces, the initial economic baseline is lower, which is why the decline isn’t felt as strongly, notes Evgeny Gontmakher, Head of the Center of Social Policy.

More often than others, well-off respondents think that everything is like normal in the country (62%) or even good or excellent (11%). The majority (74%) of those who have a low opinion of their own economic condition consider the situation in the country to be bad or terrible. Speaking of their own living situation, two-thirds of Russians (66%) report that it is hard for them to live, but they can still tolerate it. Evgeny Gontmakher believes that people are used to financial declines and the 1998 crisis is not yet forgotten. Spring is adding some optimism: people are planning to spend more time in their gardens growing their own food. Statistics attest to this as well: demand for seeds this spring grew 30%.

According to VTsIOM’s data, 43% of Russians think that their lives will not change this year. Of those polled, 27% are expecting conditions to improve and 20% to worsen. There were, by contrast, many more pessimists in February. More than 42% of respondents predicted a worsening of their personal economic situation at that time, according to Rosstat’s data. The portion of respondents expecting an improvement of their economic condition this year was 7%. Almost 38% of respondents believe that their economic situation will not change.

The public had serious negative expectations in December and January. The head economist at Merrill Lynch reported that people expected shortages and even a collapse of the banking system. Even though the situation has started to improve, this should not give cause for unrestrained optimism. According to some experts, the most unpleasant scenario was not realized. If the price of oil stays at the level of $50 a barrel, “things won’t be so bad.” The rise in the population’s optimism will revive commercial activity. Economists believe that people cut down on consumption and save their money when they have negative expectations. As soon as people decide that the worst is behind them, the level of consumption will begin to rise again.

Translated by Alinga Consulting Group.

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Source: Rbc