It does not reach the real level of inflation
The State Duma approved a law according to which pensions will be increased by 8.6% retroactively – from January 1 of this year. Earlier, President Vladimir Putin instructed the government to index pension payments by exactly this amount, above the official inflation rate. According to experts interviewed by MK, the new measure is not capable of compensating older citizens for the losses from a genuine rise in prices, primarily for food.
The indexation of insurance pensions for 30.8 million of their recipients by 8.6% will be issued retroactively, since inflation turned out to be higher than the previously adopted indexation. Earlier, First Vice Speaker of the State Duma Alexander Zhukov said that the average pension would be 18,984 rubles. During the parliamentary discussion, a deputy from the Communist Party of the Russian Federation Alexei Kurinny said that in a good way indexation should be in the region of 15.6%, and the pension should be at least 35 thousand rubles. Only this will allow us to live with some dignity: choose healthy foods, play sports, help our grandchildren. And according to Oleg Nilov, a Justice of the Russian Federation, deputies should deal with such things “without shouting from the president.”
“The decision looks belated, but the fact is that the indexation parameter for 2021 was compiled in accordance with the forecast of the Ministry of Economic Development for 2020,” explains
Professor of the Financial University under the Government of the Russian Federation Alexander Safonov. – Of course, at that time it was difficult to imagine that the situation with the pandemic and inflation, initially projected at 5.9%, but reaching 8.4% by the end of 2021, would develop so quickly. In December, the government revised its policy, taking into account the federal budget surplus, and decided to index pensions slightly above official inflation. Unfortunately, this measure does not adequately compensate for the current price increase, especially for certain product groups.”
Real inflation is now clearly above 10%, and in many food items it exceeds both 20% and 40%, notes Professor Alexei Zubets, Safonov’s colleague at the Financial University. Accordingly, pensioners and other categories of the poor spend money mainly on food. Therefore, when calculating the amount of indexation of pensions and benefits, one should be guided by price tags in grocery stores, and not by statistical inflation. An increase of 8.6% means that real incomes of pensioners will fall in 2022, Zubets concludes.
See also: “The State Duma compared the indexation of pensions with the price of one pie”