Russian consumer spending probably continued to recover in April as the labor market improves and wages rise, a sign the biggest part of the economy is helping withstand the sharpest slowdown since a 2009 contraction.
Retail sales probably grew 4.5 percent from a year earlier, after 4.4 percent in March, according to the median estimate of 18 economists in a Bloomberg survey. Unemployment probably fell for a third month, a second poll showed. The Federal Statistics Service may report the data today or May 27.
Job gains and increasing wages are underpinning consumer spending, which accounts for about half of the economy, and benefiting retailers including OAO Magnit (MGNT) and X5 Retail Group (FIVE), the country’s largest grocery chains by revenue. A European recession that extended to a record sixth quarter is pushing Russia to become more dependent on domestic demand, with a robust labor market and sustained growth in wages cushioning the impact of faster inflation on purchasing power.
“Consumer demand will likely remain resilient, supported by unemployment being very low,” Vladimir Osakovskiy, chief economist for Russia at Bank of America Corp. in Moscow and the top forecaster on the country’s retail sales and investment, said in a phone interview. “The first quarter will actually be the weakest point of the year.”
Russian stocks have suffered this year, lagging behind emerging-market peers. The Micex Index (INDEXCF) of 50 stocks had its worst drop in more than a year yesterday, taking its 2013 slide to 5.3 percent, compared with a 2.9 percent loss for the MSCI Emerging Markets Index.
Gross domestic product expanded at the weakest pace in the first quarter since the economy began growing again at the start of 2010. Consumer-price growth accelerated to 7.2 percent in April, more than a percentage point above the central bank’s target range. That has kept policy makers from easing their main lending rates.
GDP grew 2.3 percent in March from a year earlier, the Economy Ministry estimated last month. Expansion in the first quarter was 1.6 percent from a year earlier, according to the statistics service, higher than the ministry’s forecast for a 1.1 percent advance.
The consumer and investment data will be a major factor in shaping the Economy Ministry’s estimate for April’s GDP growth, according to Clemens Grafe, chief economist for Russia at Goldman Sachs Group Inc. in Moscow.
“If April confirms March, then things calm down,” Grafe said in a telephone interview. Pressure on the central bank to reduce rates “significantly declined” after the estimate for growth in March, he said.
Unemployment (RUUER) probably fell to 5.5 percent in April from 5.7 percent the previous month, according to the median estimate of 16 economists in a Bloomberg survey. Real wages probably advanced 4.1 percent from a year ago, compared with 4.2 percent in March, another survey found.
Fixed-capital investment probably expanded 2 percent from a year earlier, following a 0.8 percent contraction in March, according to the median of 16 forecasts.
“The data won’t be bad, and on the whole probably no worse than what we saw in March,” Alexei Devyatov, chief economist at UralSib Financial Corp. in Moscow, said by phone. “We’re expecting the situation to improve gradually in the second half of the year.”
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