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. Last Updated: 07/27/2016

Just 28% of Russians Are Savers

More than two-thirds of Russians have no savings and one-fifth have to deny themselves basic goods in order to survive, according to the results of a poll released Thursday.

The poll, conducted by the state-run VTsIOM agency, revealed that just 28 percent of the 1,600 people surveyed had put money aside, and that this percentage had not increased in the last two years.

Economic policy makers often complain that people's spending habits deprive the economy of "long money."

Many people lost their appetite for saving after confiscatory banknote swaps, hyperinflation and pyramid schemes in the 1990s.

After the financial meltdown of 1998 and a minor banking crisis in 2004, Russians have little trust in financial institutions and long-term economic stability.

Although wages grew by 24.5 percent in nominal terms in 2006, people preferred to spend the money before its value was eroded by inflation.

Consumer spending has made Russia a paradise for local and international retailers of items from cars to home appliances to furniture. Huge shopping malls around Moscow are packed with shoppers, while traffic often comes to a standstill as streets, traffic lights and policemen try to deal with the rapidly rising number of cars.

Many upper- and middle-class Russians also save by investing in real estate in the capital, causing prices for Moscow apartments to double in 2006.

Low savings rates also force Russian firms to borrow abroad and expose the country's domestic capital markets to speculators because of the little presence of domestic pension and mutual funds.

On the other end of the income ladder, 38 percent of Russians spend up to 74 percent of their income on food, while 20 percent deny themselves basic food staples and 52 percent do not take vacations.

President Vladimir Putin on Thursday pledged to raise living standards for ordinary Russians and close the gap between wealthy and poor that reached huge dimensions in a course of Russia's rapid and unpredictable transition to capitalism.