Russia saw a sharp rise in household bank deposits last year — especially in regions where a larger share of men were drafted

From December 2022 to December 2023, the amount of money the average Russian household had in the bank increased by 18 percent, an unusually sharp rise. While Russia’s Central bank says the spike is due to “increased economic activity and growth in real wages,” variations between Russia’s regions point to a different explanation: military salaries and compensation payments for killed and injured soldiers. Here’s what we know.

The average Russian household ended 2023 with about 18 percent more money in the bank compared to just a year earlier. The Russian Central Bank attributed this to “increased economic activity and growth in real wages.”

In the overwhelming majority of Russia’s regions, the average amount of money in people’s accounts grew by this percentage or even less, according to data published by Russia’s Central Bank.

But in about ten regions, Russians’ account balances grew more than 25 percent on average (compared to the same period in 2022). In the Tuva Republic, average increase was about 45 percent on average. The region is one of Russia’s poorest, and as of the end of 2022, nearly a third of its residents were living below the poverty line. Other regions that saw very high increases include Buryatia and the Altai Republic, where more than 20 percent of the population lives below the poverty line.

Last week, the Finnish research institute BOFIT published an analysis by researcher Laura Solanko about this sharp increase in bank deposits in certain Russian regions. Solanko noted that the spike is anomalous: before mid-2022, bank deposit trends in these regions differed little from those throughout the rest of the country. The change, she concluded, is likely primarily due to the large payments the government has given to contract soldiers and draftees, as well as compensation payments to the families of soldiers killed and injured in the war.

The Russian authorities began promising hefty payouts to Russian soldiers at the very start of the full-scale war in Ukraine. According to numerous media reports, many residents of Russia’s poorest regions joined the war specifically to improve their financial situation, while relatives of soldiers killed in the war have used the compensation payments to make major purchases they previously wouldn’t have been able to afford, such as cars and homes.

One example

Deceased Russian soldier's family uses compensation payment to buy new car 'in his memory'

2 years ago

One example

Deceased Russian soldier's family uses compensation payment to buy new car 'in his memory'

2 years ago

Typically, even payments as large as these barely make a blip in economic statistics such as a population’s average income or poverty rates. But data on citizens’ bank deposits can be especially revealing, especially in regions with low income levels; when people don’t have a lot of money in their accounts to begin with, any large inflows immediately lead to a noticeable increase, Solanko explained.

Solanko compared the list of regions that saw a major increase in residents’ deposits to data compiled by iStories and Mediazona on the number of people mobilized from each region, but she was unable to establish a precise correlation due to a lack of data for specific regions. However, when she looked at the region-specific data on mobilized Russians that is available, she found enough matches to suggest that there is a connection between the size of the increase in bank deposits and the share of mobilized men from each region.

At the same time, there’s no clear correlation between regions’ account balance increases and their casualty rates, according to data compiled by Mediazona and Meduza on Russian losses. This may be because the sharp rise in bank deposits in some regions is less a result of compensation payments for deaths than a result of large military salary payments and compensation payments for injuries.

However, there is not enough reliable data to determine precisely how much each payment type contributed to the increase in bank deposits. There’s also little data on how many soldiers and their families in these regions actually received the payments they were promised on time; many families have reported not receiving compensation payments, and the relevant budget expenditure data is classified.