This is the second article in a series examining the effects the global economic crisis has had in Russia. The first article examined Russians' views on how the crisis had affected their nation; this article looks at Russians' views of how the crisis has affected them personally.
WASHINGTON, D.C. -- Russian Prime Minister Vladimir Putin said last week that while the worst of the economic crisis may be over, it would take time, effort, and considerable resources for his country to emerge from it. Russia's record-low score this spring on Gallup's Personal Economy Index, which measures respondents' economic situations and the economics of the communities they live in, illustrates the toll the crisis exacted on Russians' everyday lives.
The subjective measures of personal economy that make up Gallup's index -- people's outlooks on the local job market, local economy, and their own standard of living -- complement traditional macroeconomic indicators such as gross domestic product (GDP) and unemployment rates. While GDP, which in Russia is anticipated to shrink by at least 8.5% this year, is an important measure of economic activity, it is an imprecise measure of how these changes translate into living conditions.
Gallup's survey, conducted in April through June, shows Russians' confidence in their nation's economy faltered as it entered recession this year accompanied by unemployment and inflation. Reflecting on their own communities and themselves, Russians' optimism about the local job market, their personal standard of living, and the local economy -- three of four items that make up the index -- withered to less than half of last year's levels.
Touched by Crisis
Russians' lack of optimism about their own situations is understandable given that most said they or their families had already been touched by some negative effect of the crisis. Russians were most likely to say price increases had already affected them (76%), followed by reductions in salaries (34%) and reductions in consumption (34%). About 1 in 10 said they'd been affected by job loss (11%) or that possibilities for additional earning were limited (10%).
Those struggling most with price increases were Russians who said their households don't have enough money even for food (5%) or said they could buy food, but buying clothes created serious problems (30%). More than 8 in 10 Russians who described their household's status this way said they had already been affected by price increases. Such price increases also likely dampened the consumer spending so crucial to economic recovery.
Bottom Line
While Russia's GDP is still expected to shrink for the year, the country technically emerged from recession in the third quarter, and the government anticipates growth to continue in 2010 and accelerate in 2011. Some, like Putin, point to positive trends that are "making themselves felt and are clearly manifested" such as easing inflation and growth in several industries. But despite the relatively positive economic news, Gallup's surveys suggest the recovery of the average Russian consumer's confidence will still take time, effort, and considerable resources.
For complete methodology and specific survey dates, please review Gallup's Country Data Set details.
Survey Methods
Results are based on face-to-face interviews with 2,042 adults, aged 15 and older, conducted April-June 2009 in Russia. For results based on the total sample of national adults, one can say with 95% confidence that the maximum margin of sampling error is ±2.8 percentage points. Other results based on face-to-face interviews with approximately 2,000 to 3,000 adults in March 2006, May 2007, and May 2008, with the maximum margin of sampling error ranging between ±2.2 percentage points and ±2.5 percentage points The margin of error reflects the influence of data weighting. In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.
Index scores are calculated at the individual record level. For each individual record the following procedure applies: The four items are recoded so that positive answers are scored as a "1" and all other answers (including don't know and refused) are assigned a score of "0." If a record has no answer for an item, then that item is not eligible for inclusion in the calculations. An individual record has an index calculated if it has valid scores for at least three questions. A record's final index score is the mean of valid items multiplied by 100. The final country-level index score is the mean of all individual records for which an index score was calculated. Country-level weights are applied to this calculation.
