Median Household Income Overview
The indicator refers to the median income of a household in a country. Median household income divides households into two equal segments, such that the first half earns less than the median income while the second half earns more. The median income is defined in PPP (Purchasing Power Parity, in Current International Dollars) terms to avoid exchange rate fluctuations due to inflationary tendencies across countries. The median income level is generally accepted as a better indication of well-being or actual income distribution as it is not skewed by disproportionate data.
According to Global Data, the top ten countries with the highest median household income in the world are Singapore, Iceland, Norway, Sweden, Ireland, Luxembourg, Belgium, the United States, Cyprus, and Australia. The average median household income (PPP) was $40,094 in 2021.
Russia Median Household Income Highlights in 2021
Russia’s median household income (PPP) hit $27,634 in 2021, an increase of 0.8% over the previous year. Between 2010 to 2021, Russia’s median household income decreased by 36.7%.
Household consumption expenditure contracted by 4.5% in 2020 as per Global Data estimates, compared to the average annual growth rate of 1.4% during 2016–2019. The contraction of the consumption expenditure in 2020 was mainly due to the COVID-19 impact on the economy. Real GDP contracted by 4.33%, compared to 1.34% growth in 2019. According to Global Data, real GDP is expected to grow by 3.36% in 2021.
After the fall of the Soviet Union, the government established various policies to create a new economic system. During this transitional period, corruption and crony capitalism caused a rift between the affluent upper class and the labor force. The Gini coefficient is a measure of income disparity, with zero representing complete equality and 100 representing complete inequality. According to the World Bank, Russia's Gini index was 37.5 at the end of 2018. This shows that income is less evenly distributed than in other European countries.
Recent trends influencing Global Economic Growth
Increased COVID-19 impact:
As a result of Omicron, a new variant of COVID-19, more cases have been reported worldwide, resulting in the disruption of supply chain management. However, the global vaccination drive has reduced the fatality rate from the coronavirus.
Rising Inflation and Interest Rates:
As a result of rising inflation rates in both developing and advanced economies, central banks have been forced to tighten monetary policy and raise interest rates to keep prices from rising. However, a steady increase in interest rates could cause financial distress in some economies.
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