Russian Retail Sales Surprise in Sign of Support to EconomyAgnes Lovasz and Zoya Shilova
Russian retail sales grew faster than forecast last month as unemployment unexpectedly fell, suggesting household demand may help shore up the sagging economy after government officials warned of a recession threat.
Receipts at merchants rose 4.4 percent from a year earlier after a revised 3 percent jump in February, the Federal Statistics Service in Moscow said today. Unemployment dropped to 5.7 percent. Economists predicted a 2.6 percent increase for retail sales and a jobless rate remaining at 5.8 percent, according to the median estimate in two Bloomberg surveys.
Russia’s $2 trillion economy is growing at the weakest pace since a 2009 contraction as Europe’s debt crisis curbs exports and corporate investment. Consumer spending, accounting for half of gross domestic product, may help ward off the threat of recession, according to Dmitry Savchenko of Nordea Bank.
“The data were on the positive side and it’s quite reassuring right now,” Savchenko, a senior analyst at Nordea in Moscow, said in a phone interview. “Household consumption remains the main engine for growth on the back of wage growth and a healthy labor market.”
The ruble weakened 1.2 percent against the dollar to 31.6240 as of 6:18 p.m. in Moscow. The Micex Index dropped 1.3 percent to 1,334.69, the lowest since June 25.
Investment unexpectedly fell 0.8 percent from a year earlier, missing the median forecast for an increase of 0.5 percent in a Bloomberg survey, the report showed.
Prime Minister Dmitry Medvedev told lawmakers today that he sees “serious” risks to the economy. He aims to boost economic expansion to a stable 5 percent, or more than twice the pace forecast for this year.
Russia risks sliding into a recession without stimulus, Economy Minister Andrei Belousov said last week after cutting this year’s growth forecast to 2.4 percent from 3.6 percent.
“The first months of the year show that the world trend of slowing economic growth is continuing, leading to serious risks,” Medvedev told lawmakers in Moscow today. “The government’s task is to implement balanced measures to achieve acceptable dynamics for the main indicators.”
Russian GDP grew 1.1 percent in the first quarter from a year earlier, expanding 2.3 percent in March from the same month in 2012, the news service Interfax cited Deputy Economy Minister Andrei Klepach as saying today.
Real disposable incomes surged 8.3 percent in March from a year earlier, the statistics office said, exceeding the median estimate of 5.4 percent. Real wages grew 4.2 percent, up from a revised 3.3 percent a month earlier. Economists projected a 5.2 percent increase.