Russian consumer spending grew less than economists estimated, adding to evidence that the economy of the world’s biggest energy exporter is losing steam.
Retail sales rose 4.1 percent from a year earlier in April, down from 4.4 percent in March, the Federal Statistics service said today in an e-mailed statement. That’s less than the 4.5 percent median estimate of 18 economists in a Bloomberg survey. Unemployment fell for a third month to 5.6 percent from 5.7 percent, missing the 5.5 percent forecast in a separate poll.
A European recession that extended to a record sixth quarter is making Russia more dependent on domestic demand as weaker growth prospects feed through to industry. Job gains and increasing wages have underpinned consumer spending, which accounts for about half of the economy, benefiting retailers including OAO Magnit and X5 Retail Group, the country’s largest grocery chains by revenue.
“April economic performance generally confirmed the deceleration trend,” Julia Tsepliaeva, head of market economics for Russia and the Commonwealth of Independent States at BNP Paribas SA in Moscow, said today in an e-mailed note. “Taking into account the strongly negative calendar effect in May 2013, the results are likely to drop more substantially next month.”
Russian stocks have lagged behind emerging-market peers in 2013. The Micex Index had its worst drop in more than a year yesterday, taking its 2013 slide to 6.4 percent, compared with a 2.7 percent loss for the MSCI Emerging Markets Index. The Micex fell 1.2 percent to 1,380.88 by today’s close in Moscow, the worst performance among emerging markets.
First-quarter gross domestic product expanded at the weakest pace 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’s kept policy makers from easing their main lending rates.
GDP grew 2.3 percent from a year earlier in March, the Economy Ministry estimated last month. Expansion in the first quarter was 1.6 percent, according to the statistics service, higher than the ministry’s forecast for a 1.1 percent advance.
“The weak expansion is supported mainly by consumption growth with real wages and disposable income increase,” Tatiana Orlova, a strategist at Royal Bank of Scotland Group Plc in London, said by e-mail. Investment data show renewed decline, she said.
Real wages grew 4.2 percent in April from a year earlier, matching the previous month’s increase. Disposable incomes rose 7.3 percent compared with 8.3 percent in March.
Fixed-capital investment fell 0.7 percent from a year earlier, shrinking for a second month after a 0.8 percent decline in March. The median estimate of 16 forecasts was for a 2 percent increase.
“All our current problems happen because of the external situation,” Alexei Devyatov, chief economist at UralSib Financial Corp. in Moscow, said by phone before data were released. “The recession in Europe is deeper than expected.”
Global economic woes are eroding Russia’s foreign sales, with exports failing to grow in real terms for eight straight months, Economy Minister Andrei Belousov said May 16. Investment by Russia’s biggest infrastructure companies may drop 12 percent to 13 percent in 2013, led by Gazprom, he said.
Slowing economic growth may reverse this quarter, with expansion set to exceed 3 percent in the second half of the year, according to Belousov.