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ariba1615
Just Starting
Joined: 04 May 2006
Posts: 8
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 Posted: Sat May 06, 2006 2:14 am Post subject: Inflation in Russia |
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I plan to visit Russia (St. Petersberg) in June. I am trying to understand inflation in Russia. The official number is low like 5 or 6% but my Russian friends tell me that it's very high some thing like 12% to 15%. I still not able to comprehend how an average Russian making $500 per month is able to live in Russia ?. The housing costs at least $300. Dinner in a nice place in Rostov costs $100 for two people. Why are the prices in Russia not in line with the income of the people ?. Economically it doesn't make sense. Is there a parallel economy in play. Who will buy the goods when the goods are so expensive ?.
In the same token, I hear that there are several Billionaires in Moscow. And Moscow is more expensive than New York. If Moscow is more expensive than New York, how come the salaries of Moscovites are lower than New York?. |
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vorteks
VIP
Joined: 08 Aug 2004
Posts: 571
Location: European Union
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| Posted: Sat May 06, 2006 6:11 pm Post subject: |
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It s what capitalism is all about, giving the most possible to assets owners while giving the least possible to assets producers. Russia is certainly one of the most capitalist countries in the world, since regulations are at the lowest possible.
Anways, you could find the answers to your quesiton by yourself :
There is a double pricing system. Non russian speaking tourists are most likely to pay more for taxis, hotels, visits...
People do more with less and use collective solutions : they dont have one car per person but rather use collective transports, they dont need 100 m2 per person but rather share accomodation and live in apartments, they dont go to restaurants everyday but rather cook themselves.
Piter and Moscow have rather self sufisant economies separated from the rest of Russia, with higher income and higher costs.
In the rural areas, most people grow their own food.
Black market is widespread, trading prefered to buying, which is wealth that doest reflect in official salaries statistics (and taxes) |
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MrSpice
Lounge Wizard
Joined: 14 Jul 2003
Posts: 3431
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| Posted: Mon May 08, 2006 5:05 pm Post subject: Re: Inflation in Russia |
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| ariba1615 wrote: | I plan to visit Russia (St. Petersberg) in June. I am trying to understand inflation in Russia. The official number is low like 5 or 6% but my Russian friends tell me that it's very high some thing like 12% to 15%. I still not able to comprehend how an average Russian making $500 per month is able to live in Russia ?. The housing costs at least $300. Dinner in a nice place in Rostov costs $100 for two people. Why are the prices in Russia not in line with the income of the people ?. Economically it doesn't make sense. Is there a parallel economy in play. Who will buy the goods when the goods are so expensive ?.
In the same token, I hear that there are several Billionaires in Moscow. And Moscow is more expensive than New York. If Moscow is more expensive than New York, how come the salaries of Moscovites are lower than New York?. |
First of all, June is a great time to visit St Petersburg - the nights are long and bright, and since the city is getting ready for the summit of G8 that is going to take place in july, I bet they are going to clean up the center of the city even more.
Many of the assumptions you're making are not correct. Many people have free or very cheap apartments that they got during the soviet times for free or for little money. They still build housing and distribute it for below the market rate, although the line to get this kind of housing is probably 15+ years long. Therefore, the main challenge is for the young generation that needs to have their own place to live and those coming from other cities that do face rents of $300 and more per months. You can certainly find a place where you can have a good dinner for 2 for $15-20 outside of the center of the city. Overall, the difference between the center and a regular neighborhood in terms of prices is huge. When people talk about Moscow and how expensive it is, they really talk about the center of Moscow. Just a few subway stops from the Red Square, prices for everything are much lower (as is the case in New York where I live). The incomes vary a lot in Russia. A young financial analyst or computer expert in Moscow working for a German bank can make 3000-4000 a month, and a college professor can make $300/month or less, while, a manager at a car dealership can make $2000-3000/month. It's the situation where people envolved in a new economy make much more than the rest.
Also, remember that some prices are set on the world markets and have nothing to do with salaries. Some prices in Russia are still state-controlled and lower than those outside of russian for some reason, but some things are just as expensive in Russia as they are in the west.
Don't know much about inflation in Russia but it's important to know how that number was obtained. Here in the US most peolpe also feel that inflation is much higher than the official number because it does not include the rising cost of healthcare, housing and energy. |
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GuideSpb
Frequent Guest
Joined: 20 Jun 2006
Posts: 36
Location: St.Petersburg, Russia
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| Posted: Wed Jul 05, 2006 12:55 am Post subject: Re: Inflation in Russia |
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| ariba1615 wrote: | I plan to visit Russia (St. Petersberg) in June.
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my Russian friends tell me that it's very high some thing like 12% to 15%.
correct
I still not able to comprehend how an average Russian making $500 per month is able to live in Russia ?. The housing costs at least $300. Dinner in a nice place in Rostov costs $100 for two people.
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It is possible to live in Russia for $500 per month, but you couldn't eat a dinner in a nice place like a "Rostov" in this case. In this case you will prepare breakfest, dinner and luch for you byself |
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