Bloomberg News

Russian Retail Probably Kept Pace in June in Sign of Resilience

July 17, 2012

Russia’s retail sales probably matched May’s increase last month while unemployment remained at the lowest in at least 13 years, tempering concerns that economic growth is faltering, a survey of economists showed.

The jobless rate was unchanged at 5.4 percent, a level last seen four years ago and the lowest since at least 1999, according to the median estimate of eight economists in a Bloomberg survey. Sales grew 6.8 percent from a year earlier, a separate poll of 12 analysts showed. The Moscow-based Federal Statistics Service may report the data today or tomorrow.

Consumer spending, which accounts for half of Russia’s economy, is encouraging companies to maintain headcounts, helping balance slowing industrial-output growth as the economic outlook dims in the country’s biggest trading partners, the European Union and China. Industrial production slowed to 1.9 percent in June, easing more than economists predicted.

“Even if the deceleration in the June growth rate may suggest weaker global demand, we still believe that local consumption has a good chance to remain supportive,” Natalia Orlova and Dmitry Dolgin, analysts at Alfa Bank in Moscow, said in a research note. “We expect the June consumption statistic will be key in confirming or rejecting the hypothesis regarding the deterioration of the trend” in Russia’s economic growth.

Russia, the world’s largest energy exporter, left its refinancing rate unchanged at 8 percent for a seventh month on July 13 after the central bank cited a strong labor market and lending to households as “creating grounds for maintaining the stability of domestic demand in the future.”

Confident Consumers

Russian consumers were more optimistic in the second quarter than at any time in almost four years as people reported improvements in the country’s economy and their own finances. The consumer confidence index rose 1 point to minus 4, the highest since the third quarter of 2008, when the measure peaked at plus 1, the statistics service said July 5.

Real wages probably grew 10.5 percent in June, compared with an 11.1 percent increase the previous month, according to the median estimate of 10 economists in a Bloomberg survey.

Rising salaries are helping companies such as OAO Magnit (MGNT), Russia’s biggest food retailer by market value, which said sales increased 34 percent in June as it opened 109 new stores.

Fixed-capital investment probably grew 7 percent last month, slowing from a 7.7 percent rate in May, estimates showed. The government reduced its projection for economic growth this year to 3.4 percent from 3.7 percent, saying investment will be weaker than initially estimated.

“We believe healthy expansion of Russia’s domestic demand, particularly its consumer sector, will continue to support industrial-production growth,” Vladimir Pantyushin, chief economist at Barclays Capital in Moscow, said by e-mail.

To contact the reporter on this story: Milda Seputyte in Vilnius at

To contact the editor responsible for this story: Balazs Penz at

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