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April in Russia: Consumption Slows
Rosstat data on retail trade in April show the first signs that its turnover may be slowing from inflation and reduced availability of consumer crediting. Trade turnover was down to 13.2 percent in April, compared to the usual 16-17 percent in recent months. It is the smallest indicator in the last two years. The drop was most significant in Moscow, according to the state statistics service. Economists say that the drop can be seen as a repercussion of the world economic crisis. Salaries in April grew only 12 percent compared to April 2007. “The growth rate of real salaries is slowing due to inflation,” said Tatyana Orlova of ING Russia.
Russian banks have come to prefer long-term credits – mortgages – to consumer credits. The growth rate of consumer crediting fell from 8.6 percent in the first quarter of 2007 compared to that quarter of 2006 to 7.6 percent this year’s first quarter compared to last year’s. The latter indicator grew from 8.7 percent to 9.4 percent for the non-financial sector. Demand for consumer and investment credit has been a driving force in Russian economic growth in recent years. But while the growth of retail trade turnover is shrinking, investments in fixed assets is growing. The volume of investment in fixed assets grew 20.6 percent in April over April 2007, and in March it grew 20.2 percent year-on-year. At the same time, total foreign capital in the Russian economy grew by $400 billion in the first quarter of this year, compared to last, Rosstat says, and direct investment fell by 43 percent.
In Moscow, which accounts for 20 percent of the country’s retail trade turnover, retail growth rates plummeted to 5.7 percent. In March, that figure was 13.1 percent. Some suspect an error in Rosstat’s calculations. “Internal accounting shows that our turnover not only did not fall, it showed growth,” Nadezhda Senyuk, press secretary of the Tekhnosila, stated.
www.kommersant.com
All the Article in Russian as of May 26, 2008
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Photo: Nikolay Cyiganov
