By Andrei Skvarsky.
A survey by Sberbank suggests that inflation is a bigger concern for Russians today it was than a few months ago.
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Declining unemployment is partially offsetting inflationary concerns, according to Sberbank CIB, the investment arm of Russia’s biggest lender.
But inflation was flagged as a major macroeconomic problem by 63% of respondents in the latest of bimonthly surveys by Sberbank CIB which were launched in February this year and explore consumption trends among middle-income Russians.
The average middle-class Russian has begun to spend more on utilities and food, pay more in loan interest, and cut down on purchases of consumer electronics and clothes and on dining out, according to the fourth Sberbank CIB Ivanov Consumer Confidence Tracker survey.
The bimonthly studies focus on retail, banking, telecommunications, media, information technology, real estate and transport. The “Ivanov” part of their title was chosen as the most common Russian family name.
“Only 18% of respondents think that now is a good time for big-ticket purchases,” Sberbank CIB says in its survey, which it commissioned Stockholm-based market research firm Cint to carry out, though it adds that “a surprising 40% still plan to change their car within the next two years”.
The average savings ratio – the share of income saved monthly – declined to 9.4% in July from 10.4% in May.
Moreover, 52% of “Ivanovs” who were questioned said their employer was considering personnel cuts and 35% feared they would be fired.
The employers of only around 9% of respondents were hiring. On the other hand, 29% expected their employer to expand within the next 12 months, while 20% believed their company was in for a decline in activity.
According to respondents’ perceptions, food prices have risen by an average of 12% year on year. Sberbank puts the increases at between 10% and 11%, and the State Statistics Service at 8%. Retailers estimate that food has gone up by between 7% and 8%. Producer inflation is put at 6.5% by Sberbank.
Respondents said they could tolerate another year-on-year price rise of 8% before they started revising their food budget and/or trading down generally.
Yet despite inflationary concerns, 61% of respondents rated quality over price in shopping.
The survey involved questioning 2,300 people aged 18 to 65 and living in 164 cities with populations of over 100,000. A tracking error of less than 2% was possible, Sberbank CIB said.
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