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Russia Retail-Sales Growth Accelerates on Wages, Incomes

Dec. 19 (Bloomberg) -- Russian retail-sales growth quickened more than economists predicted in November as faster-than-forecast increases in wages and incomes allowed consumers to spend more.

Sales rose 4.4 percent from a year earlier, after a revised 4 percent increase in October, which was the slowest pace since January 2011, the Federal Statistics Service in Moscow said today in an e-mailed statement. The median forecast of 14 economists surveyed by Bloomberg was for a 4.1 percent advance. The jobless rate rose to a four-month high of 5.4 percent, in line with analysts’ expectations, from 5.3 percent.

The world’s largest energy exporter has relied on domestic demand, buoyed by lending growth and low unemployment, to insulate the economy from Europe’s debt crisis and slowing growth in China. Gross domestic product expanded 2.9 percent from a year earlier in the third quarter, the slowest pace since it began recovering at the start of 2010.

“We just saw consumer demand stabilizing at a moderate pace compared to the first half,” Vladimir Kolychev, head of research at Societe Generale SA’s OAO Rosbank unit in Moscow, said by e-mail. “We still see headwinds to the growth outlook in the near term as wages are likely to slow down on the back of less aggressive public-sector wage indexation while consumer credit is expected to gradually cool off.”

Stocks, Ruble

The benchmark Micex Index, which has gained 5.6 percent this year, was 1.4 percent lower at 1,480.12 at 5:30 p.m. in Moscow. The ruble was up 0.6 percent at 30.686 per dollar.

The Economy Ministry cut its forecast for 2012 retail-sales growth last week to 5.7 percent from 6.1 percent in August and reduced its estimate for real-wage growth to 8 percent from 9.1 percent.

Russian lending growth will probably slow to 18 percent-20 percent this year and next from 30 percent in 2011, Standard & Poor’s said this month. Credit downgrades are possible next year because of risks including “spectacular” growth in retail loans, it added.

Real average wages increased 7.3 percent from a year earlier in November, the fastest pace in four months, compared with a revised 7.1 percent in October, the service said. Disposable incomes advanced 6.7 percent, compared with a revised 3.5 percent the previous month.

Fixed-capital investment, a priority in President Vladimir Putin’s third term, grew 1.2 percent, slowing from 4.9 percent in October and missing the 3.5 percent median forecast in a Bloomberg survey of 13 economists.

To contact the reporter on this story: Ott Ummelas in Tallinn at oummelas@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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