By Andrei Skvarsky.
Surveys by a research subsidiary of Deutsche Boerse suggest that consumer sentiment in Russia dropped to a “record low” in May after edging up steadily for a few months.
“Sentiment, which has followed a downward path since mid-2013, appeared to have troughed at the turn of the year, but May’s outturn suggests it’s too early to conclude that Russia is on a firm recovery path,” the London-headquartered MNI Indicators company said in a statement.
The MNI Russia Consumer Sentiment Indicator, an index updated after each of the monthly surveys launched by MNI Indicators in March 2013, showed a month-on-month decline of 5.9 per cent in May. It was down 2.8 per cent since the start of 2016 and 7.6 per cent lower than a year ago.
All components of the surveys – how respondents assess their current personal financial situation as compared to how they saw it a year ago and what they expect it to be like one year from now, whether they are willing to buy major household items such as cars, and what they expect overall business conditions in Russia to be like one year from now and within the next five years – showed declines.
“We had thought that the worst was over for the Russian consumer, but the results for May show consumer sentiment falling back to a record low,” said MNI Indicators chief economist Philip Uglow.
“With household finances still feeling the pressure of negative real income growth, our survey shows that buying conditions for household durable goods as well as cars declined to the worst on record. The recent strengthening in the rouble and disinflationary trend should allow the central bank to make a much needed reduction in interest rates sooner rather than later”.
MNI Indicators’ monthly Russian consumer sentiment surveys are polls in each of which at least 1,000 urban residents are questioned across the country. The polls are telephone interviews with each interviewee selected randomly by a computer.