The kremlin’s Policies Have Robbed russians of the Desire to Think About the Future

Consumer sentiment in russia continues to deteriorate rapidly. As of today, the consumer sentiment index among russians has fallen to its lowest level since May 2022 and stands at just 89.5 points. This indicates growing uncertainty among the population regarding the people’s own financial situation and the country’s economic prospects.

Fewer and fewer russians are able to build up savings. The share of the population able to set aside “disposable” income has fallen by 6.5% and now stands at 47.9%. At the same time, more than a third of citizens (34%) believe that now is a bad time to save money, and only 26% view the situation more optimistically. These figures are the worst in the last two and a half years and show a significant decline in confidence in russia’s economic stability.

Depositors’ behavior also reflects this loss of confidence in the future. In June alone, russians withdrew 0.5 trillion rubles from bank deposits, while new deposits totaled only 0.2 trillion rubles – an amount that does not even cover the interest accrued by the banks. According to expert estimates, real household savings fell by 32.1% in the first quarter.

The deterioration in economic sentiment is a natural consequence of the kremlin’s policies. The war against Ukraine, international sanctions, the reorientation of the economy toward military needs, and the decline in real household incomes are having an increasingly noticeable impact on russians’ standard of living. This is leading to a forced shift in consumption patterns: citizens are increasingly opting for used goods over new ones.

In the first half of this year, russians’ spending on used cars rose by 13%. Today, for every new car in russia, there are nearly five used ones. Additionally, the share of cars less than five years old fell from 30% to 25% over the course of the year, while the share of cars older than ten years rose to 41%. This indicates not only a decline in the population’s purchasing power but also a gradual deterioration in consumption patterns.

The prospect of a new wave of mobilization remains a significant source of public anxiety. Against the background of the kremlin’s plans to continue the war against Ukraine, an increasing number of russians are considering leaving the country. Talk of a potential mobilization following russia’s state duma elections this autumn is further fueling the situation. This is confirmed by a sharp 30% increase over the past three months in apartment rental prices in Armenia, driven by demand from russians.