Russia sees poverty as a 'striking problem'

A World Bank report found the poverty rate in the oil-rich country was the highest in nearly a decade.
By Daniel J. Graeber  |  Nov. 30, 2017 at 7:52 AM
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Nov. 30 (UPI) -- Russia, whose economy relies heavily on oil and natural gas revenue, needs to take "real steps" at combating poverty, the prime minister said.

"It is important that with our consolidated efforts we take real steps aimed at combating poverty," Russian Prime Ministry Dmitry Medvedev was quoted by Russian news agency Tass as saying.

The World Bank found the Russia's poverty level last year was the highest it's been in more than a decade. Last year, 13.5 percent of the population lived at or below the poverty line.

"Declining inflation and growing real wages led to a modest decline in Russia's poverty rate in the first half of 2017, compared to the same period last year," Andras Horvai, the bank's country director for Russia, said in a statement. "However, the current poverty rate at 14.4 percent remains elevated and the share of vulnerable people, who may fall back to poverty, is still on the rise."

In its latest estimate, the Central Bank of Russia said inflation was around 2.7 percent, below its target rate of 4 percent. In mid-November, the International Monetary Fund said inflation will likely stay below the target rate through the end of the year, but move closer to 4 percent next year.

Mikhail Mishustin, the head of the Federal Taxation Service, said federal coffers received $240 billion in tax collections over the last 10 months, which was 19.1 percent higher than during the same period one year ago.

The prime minister said that, despite the growth, poverty was "one of the most striking problems of our modern economy."

Russia's currency lost considerable value at the start of last year and the broader economy faced dual strains from lower crude oil prices and economic sanctions imposed after the 2014 annexation of the Crimean Peninsula from Ukraine.

Russia is party to a multilateral effort, led by the Organization of Petroleum Exporting Countries, to trim the surplus of global crude oil inventories with coordinated production declines. It's also the largest non-OPEC contributor.

Total Russian crude oil production is up 1.8 percent from January. The nation's energy ministry published no data for natural gas production, though the country is a main supplier to the European economy. Total crude oil exports are up 5 percent since the beginning of the year.

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