Russian consumer confidence fell last quarter to the lowest in 1 1/2 years as the economy slowed and inflation held above the central bank’s target.
The consumer confidence index fell 2 points to minus 8, the weakest since the second quarter of 2011, the Federal Statistics Service in Moscow said in an e-mailed statement today. The biggest factors weighing on sentiment were assessments by Russians of changes in the economy over the past year and their material wellbeing, according to the report.
Russia, which relies on household spending for about half of its economy, faces a slowdown this year as income growth is projected to weaken. The decline in household comfort followed signs that private consumption was slowing and will probably continue to sag into the first half, said Vladimir Miklashevsky, an economist at Danske Bank A/S in Helsinki.
“No large growth is expected in wages, and inflation doubled compared with a post-Soviet low in the first half of 2012,” Miklashevsky said by e-mail today. “For 2013 we expect lower confidence than in 2012, but no dramatic drop.”
The Micex Consumer Goods and Services Index erased gains and was down less than 0.1 percent as of 5:09 p.m. in Moscow. The benchmark Micex Index rose 0.3 percent to 1,512.11.
The deteriorating consumer outlook may trim earnings for companies including McDonald’s Corp. and Burger King Worldwide Inc., which both highlighted Russia as a key market for growth in the third quarter.
Russia’s economic expansion is forecast to slow to 2.5 percent in the fourth quarter, the weakest pace since a recovery began in 2010, according to the median estimate of 14 economists in a Bloomberg survey. Private consumption will remain the main driver of growth this year, advancing 4 percent and outpacing the broader economy, BNP Paribas SA said in a report this week.
“The economy is indeed slowing down, although still performing much better compared to debt-ridden economies across Europe,” said Piotr Matys, an emerging-markets analyst at 4cast Ltd. in London. “I expect inflation to remain higher throughout 2013 compared to 2012 and the central bank may struggle to reach its end-year target.”