Kommersant reports that even when personal incomes appear to be rising year-on-year, they can still be seen to be diminishing when a broader perspective is taken. It also highlights the fact that the Kremlin's statistics are fundamentally unreliable.

Rosstat released data yesterday that indicate Russians' nominal incomes fell unexpectedly by 2.7 percent on average in June, for the first time since 1997. Real incomes fell 4.9 percent. This points out that salaries cannot rise forever, even when oil prices are high. The average monthly income in Russia in June 2006 was 9870 rubles ($350), 24.1 percent more than a year ago. The average nominal salary a month later was 11,220 rubles ($400), 28.6 percent higher than a year ago. Real incomes, after mandatory payments and taking inflation into account, grew 11.2 percent in a year.

Kommersant calculates that, taking season fluctuations into account, real incomes fell in July in comparison with July 1997. Real incomes in July have not fallen since 1998. Income traditionally fluctuates seasonally. It grows sharply at the end of the year, falls sharply in January, followed by smaller decreases in May and August. A fall in incomes in July has not been noted in recent years.

Some analysts expressed doubts about the data from the Russian federal statistics agency. The mistake would be large, if it exists. Lilia Ovcharova, director of scientific programs at the Independent Institute of Social Policy. She notes that incomes, both real and nominal, grew very rapidly in the first half of the year, creating a “base effect,” when very high salaries are compared. Furthermore, many workers paid from the federal budget have been able to afford vacations for the first time. Rosstat statistics show that budgeted employees' incomes are growing faster than the average. It is also possible that Rostat's methodology is responsible for the fall. Rosstat reflects for rubles received from selling dollars as growth in income. In July, those sales amounted to about 1.4 trillion rubles ($52 billion), indicating that the public is rapidly eliminating its stores of foreign currency. But a fall in the exchange of hard currency for vacation purposes could be reflected in the Rosstat statistics as a fall in incomes. Data on currency sales in July will be available only in September.