By Andrei Skvarsky.
The latest of monthly surveys by a Deutsche Boerse-owned think tank suggests the average Russian is increasingly worse off, is worried about their current and future finances and has gloomy outlooks for Russia’slabour market and economy in general as recession and possible further western sanctions loom large.
The Russia Consumer Indicator based on May’s surveyby MNI Indicators, a division of research firm MNI, shows the fourth consecutive monthly fall in consumer sentiment with confidence plummeting 12.2% since the start of the year.
An increasing number of consumers felt they could not afford big ticket items such as large domestic appliances or cars.
Views on current general business conditions were the most pessimistic since MNI Indicators launched its monthly surveys in March 2013, MNI said in a report, arguing there is “no short-term solution” to woes that emerged long before the Ukraine crisis but have been made worse by the US and European Union sanctions punishing Russia for its annexation of Crimea.
“The collapse in Russian consumer sentiment continued in May as consumers faced increased inflation and higher interest rates,” said MNI Indicators chief economist Philip Uglow.
“With Russia set to plunge into recession, our survey shows consumers becoming increasingly negative on the employment outlook suggesting a weakening in the labour market ahead. Meanwhile the central bank finds itself in the unenviable position of having to keep monetary policy tight while growth flounders.”
“There’s no short-term solution to Russia’s ills, and while it may have found a friend in China, it needs to ensure its relations with Europe are not damaged further,” Uglow said.