This winter will mark three years since Russia abruptly embarked on a course of political and economic isolation. Lower oil prices and the devaluation of the ruble dealt a serious blow to the population’s economic well-being.



By its own evaluation, Russia’s middle class shrank by more than 16 percent, shedding an incredible 14 million people.



This is the fresh data of the so-called “Ivanov Consumer Index” (in honor of Russia’s most widespread surname), evaluated by Sberbank CIB analysts.



A Sberbank CIB survey found that in Autumn 2014, prior to the devaluation of the ruble, 61 percent of Russians considered themselves members of the middle class. That number now stands at 51 percent, with the “missing” ten percent now members of the lower class. The reason: costs are rising faster than revenues. Those with the lowest incomes must reduce consumption of all but vital necessities and find cheaper options for the goods and services they do purchase. As of this summer, real incomes had fallen by 7 percent year on year, and real pensions were down 4 percent after adjustments for inflation.



Sberbank CIB has published its Consumer Confidence Index since early 2013. Every quarter since, the consumers who felt their economic situation had worsened in recent months outnumbered those who felt it had improved. The two worst periods were the winter of 2014-15, when the ruble fell and prices rose, and the winter of 2015-16, when price hikes began noticeably outstripping incomes. Since then, indicators have improved slightly but remain negative overall, and have yet to return to the level of 2013 when incomes were still rising.



Consumers have some cause for optimism in that inflation has slowed and a number of companies have begun hiring again, calming fears of job loss. Overall prospects for the future, however, remain bleak.



What is Russia’s middle class? It depends on the definition and, overall, is very hard to assess because of the disproportionate financial distribution across the country. The Sociology Institute of the Russian Academy of Sciences considers it the 44 percent of all Russians who, as of one year ago, had incomes totaling 23,000 rubles ($365) per month per family member, including children and the elderly.



But even more important is the fact that 10 to 20 percent of that group feel they are no longer members of the middle class. What’s more, many of those who still consider themselves part of the middle class have had to economize.



Russia’s countersanctions aimed at food products from Europe and Ukraine have played a major role: they not only deprived the upper ranks of the middle class of the various imported delicacies to which they had become accustomed, but also caused Russian food prices to climb dramatically.

