World Bank adds Russia to list of high-income countries
Photo: Svetlana MAKOVEEVA. Go to Photobank KP
Good news has come from the West: the World Bank has recognised Russia as a high-income country. Previously, Russia was among the upper middle-income countries. Does this mean that Russians have started to earn more and live better?
The World Bank classification is based on gross national income per capita. It is the total value of all goods and services produced in a country during the year. For fiscal year 2024 (July 1, 2023 – June 30, 2024), it was $14,250 per capita. To be included in the World Bank’s top category, a country must have a gross income per capita of at least $13,845. A year earlier, this figure was $12,830 in Russia.
In total, countries are divided by income level into four groups:
– high;
– above average;
– below average;
– short.
Now, in terms of income, Russia is on the same list (the highest) as the United States, Canada, Australia, Japan, Saudi Arabia and most European countries. By the way, this year, together with Russia, Bulgaria and Palau moved into the category of high-income countries.
According to the World Bank, economic activity in Russia has increased mainly due to the increase in turnover in the military industry. The recovery of the trade and financial sectors of the economy also had a positive impact. This led to growth in nominal and gross domestic product (GDP). The World Bank recorded an increase in these indicators by 3.6 and 10.9%, respectively. It should be noted that national income increased by 11.2%.
But gross national income should not be confused with the real income of the population.
– There is no doubt that Russia is a rich country. We are world champions in terms of the value of natural resources; no one has such wealth. But in this case we are talking about gross national income, which is the country’s GDP plus our income earned abroad and minus the income of foreigners earned in Russia. Roughly speaking, this is the country’s GDP as a whole, not the income of the people,” Alexey Zubets, director of the Institute for Socio-Economic Research at the Financial University under the Government of the Russian Federation, explained on “KP” radio.
At the same time, he noted that the life of Russians is improving financially, as salaries in the country are increasing.
– Last year, real wage growth (i.e. minus inflation) exceeded 8%, this year it is expected to be 5%. Research shows that 30% of the country’s working population experienced an increase in income during these six months. Incomes are increasing, and this is reflected, among other things, in the GDP growth noted by the World Bank. In general, Russia is following an upward trend. If we take the volume of consumption of the same foodstuffs and compare it with what it was in 2014-2015 (these were the best pre-crisis years), we will see that today, in most respects, Russians live better than they did 10 years ago, before our economic problems associated with sanctions began,” says Alexey Zubets.
