Russian consumer spending slowed more than economists estimated in August and investments fell the most since 2010 as the world’s biggest energy exporter remains in its steepest economic slowdown since 2009.
Retail sales grew 4 percent from a year earlier after a revised 4.4 percent increase in July, the fastest in four months, the Federal Statistics Service in Moscow said today in an e-mailed statement. The median estimate of 18 economists in a Bloomberg survey was 4.2 percent. Fixed-capital investment unexpectedly shrank 3.9 percent, compared with the median estimate of a 1.6 percent increase in a separate poll.
The economy unexpectedly slowed in the second quarter, with gross domestic product growing 1.2 percent from a year earlier, the weakest expansion since growth resumed after a 2009 contraction. Economy Minister Alexei Ulyukayev reiterated a 2013 growth forecast of 1.8 percent in a speech to lawmakers today, predicting an improvement in the second half.
“The central bank will need to do something because economic growth has been below its potential for a few months,” Juri Kren, an economist at IdeaGlobal in London, said by phone. He predicts policy makers will cut their new key policy rate by 50 basis points by the end of the year.
Bank Rossii on Sept. 13 introduced the one-week auction rate for providing or absorbing liquidity as its key rate, now at 5.5 percent, to become more transparent to the market as it moves toward an inflation-targeting regime by 2015. Chairman Elvira Nabiullina, who took the helm in June, signaled in an interview with Itar-Tass newswire last week the bank may start “a gradual reduction” in borrowing costs as inflation slows.
Spending by households, which accounts for about half of the economy, has remained a growth engine with the help of rising consumer borrowing, while weak global demand has stifled industrial output and investments.
Unemployment fell to 5.2 percent in August from 5.3 percent in July, in line with forecasts and matching a five-month low reached in May, the service said.
Real disposable incomes rose 2.1 percent in August from a year earlier, exceeding the median estimate of seven economists for a 2 percent gain.