MNI Indicators: Consumer sentiment in Russia bleakest since 2013

By Andrei Skvarsky.

Monthly surveys by MNI Indicators, an intelligence subsidiary of Deutsche Boerse, suggest that consumer sentiment in Russia went down for the second consecutive month in October and overall hit its lowest mark that month for the past two and half years.

Respondents, about 1,000 people living in cities across Russia, selected randomly by computer and interviewed by phone, were more pessimistic in October about their future financial status and about what the general business environment in the country would be like in one year’s and five years’ time, according to an MNI Indicators statement.

The statement quoted MNI Indicators chief economist Philip Uglow as saying Russians’ feelings about the job market suggested “there will be no quick turnaround.”

More interviewees than in any of the previous surveys, which were launched by the London-based firm in March 2013, expected the employment situation to worsen over the coming year.

There were also other negative records set in October in the history of the polls.

One was the proportion of those questioned who complained about the cost of living. Nearly all of them were spending at least 70% of their disposable income. High inflation was expected in the coming year as well.

Another record was the large proportion of interviewees thinking one would be well-advised to put off buying big-ticket items such as cars. Respondents who would have liked to buy a car, for example, were put off by anticipated rises in petrol prices over the coming year.

The respondents’ current financial situation remained unchanged since September, but that month it was still close to the lowest point on record in the history of the surveys, MNI Indicators said.

“Consumer sentiment remains at a very low level following the sharp decline seen over the past two years. While there have been some signs of stabilisation this year, the October data exhibits further weakness, with a particularly sharp fall in the outlook for the job market suggesting there will be no quick turnaround,” Uglow said.

“A more accommodative monetary policy stance may offer some relief to consumers, although the continued high level of inflation expectations cautions against cutting too aggressively. Moreover, the increasing likelihood of Fed rate lift-off could tie the central bank’s hands, at least in the short-term.”

Each of MNI Indicators’ Russia consumer sentiment surveys since March 2013 has shown the overall predominance of negative over positive sentiment, albeit occasionally by very narrow margins.

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