The unprecedented crisis will require fundamental changes in Russia’s fiscal policy. Financing anti-crisis measures will involve not only using the National Welfare Fund, but also moving away from fiscal rule and using unconventional fiscal and monetary tools.
The unconventional nature of the crisis requires unconventional measures. About one third of all jobs in Russia are at risk, and the main objective is to enable those who have lost their jobs and income to return to paid work quickly when the lockdown is lifted.
Most Russians believe that loans make their life tougher, but almost 50% of households have outstanding loans. Many borrow impulsively without regard to consequences, although the majority manage to pay them off.
Analysis of recent social changes in Russia shows that Russians are actively moving between income groups. However, it suggests a precariousness of even modest prosperity, rather than real accessibility of top income groups.
Bad debts can be both a consequence of the borrower’s reduced financial circumstances and an instrument of unfair banking. Each of these problems has its regulatory solution but the key principle should be market responsibility of the owners and managers.