It would be a mistake thinking that members of the cabinet do not get affected with the inflation growth. It happens every Thursday at the meetings of the government. One may suppose that when Vladimir Putin will become Prime Minister the feelings by the ministers will become equal to those by needy people visiting grocery shops, in terms of negative impact by the inflation figures on their nervous system. Both categories will be under stress mainly due to the feeling of one’s inability to change the situation somehow.

According to official reports, inflation rate was 4.8% in the period from January-March 2008, which is more than a half of the year’s target, but significantly less than price fluctuation that might have been noticed by the average consumer. Along with that, the feelings by consumer differ from city to city. According to our own alternative monitoring of the price changes, the standard food set in Moscow has gone up for 14% in three months, while in Voronezh the deflation was observed. Of course, it would be silly to say that the life standards went down in Moscow and rose in Voronezh during this period. It would be rather true to speak about the lack of statistical picture for the whole country.   

It’s not that our State Statistics Agency stretches the truth forging the “right” figures in order to make the “right” reports. The matter is that there cannot be the unified inflation rate in the country. This is individual for every region and even for every single shop. What is more important, inflation rate changes depending on the level of income by the citizens consuming goods and services.  

What has been rising in price most of all recently? Both state statistics and private consumption experience will tell you that it’s about certain articles of food like bread, milk, eggs, meat and fish.

Let us assume that your diet is restricted with above mentioned foods and that you spend half of your income on food. If any of the above mentioned food items goes up for 20% then your aggregate food spending would increase for 10%. That would mean you’ll have to reduce spending money on anything else from medicines to visiting cinema theaters. And that’s only a theoretical model not considering such an unpleasant thing as household running costs.    

But when specific weight of the food items is only 10% of your family budget, then inflation will make you poorer only for 2%, which is much less tangible, and you will still have money for paying your bills and going to the theaters.

Obviously, the less the income the more is the share of the food articles in the general spending. According to the State Statistics Agency, the average salary in Russia in 2006 was 10,634 rubles, and the shares of citizens having more or less than this average figure was nearly the same.  And the gradation within those groups looks much more interesting. Only 26.5% earned over 12,000 rubles, i.e. 20% more than the average salary, while the share of those earning 7,000 rubles and less, i.e. 20% less than average salary, was 46.7%. 

So the number of relatively poor is twice as much as the number of relatively wealthy. And this is about employed people. Besides, there are retired people, sharing one third of the whole population. And their pensions are much less than the average salary. Let us not forget about unemployed, disabled persons, unmarried mothers and other categories of people receiving social benefits. Considering that officially 7.4% of the population has the salary less than 3,000 rubles, it turns out that wherever the poverty line was drawn, the poor and poorest people will be sharing more than the half of the population.    

The formula “poor and poorest” has relation not only to statistics. Those people have to save each ruble not out of economy, but out of surviving reasons. The technology of surviving is individual and is not described in any statistics data. This is why the state statistics data cannot give adequate answer about how the country is living really. They only can be sufficient for assuming what the agenda of the next meeting of the cabinet can be.