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UPDATE 1-Russian retail sales, wages data add to upbeat economic picture
April 18, 2017 / 3:11 PM / 7 months ago

UPDATE 1-Russian retail sales, wages data add to upbeat economic picture

* March retail sales down less sharply than forecast

* Wages up 1.5 pct, impact on inflation modest

* Central bank may cut rates this month

* Some investors see good news bias in recent Russian data (Adds analysts’ comments, detail)

By Andrey Ostroukh

MOSCOW, April 18 (Reuters) - Russian retail sales fell less than expected in March while wages rose modestly, data showed on Monday, supporting official indications that the country’s economic crisis is abating.

The main gauge of consumer demand, retail sales declined 0.4 percent year on year terms after dropping 2.8 percent in February, Federal Statistics Service Rosstat said. Analysts polled by Reuters had forecast a fall of 1.2 percent.

Real wages were up 1.5 percent, Rosstat also said, easing concerns voiced by the central bank that rapid wage growth might cause inflationary pressures to build. Analysts had predicted a rise of 2 percent.

“The economy’s condition improved in March compared with the two preceding months,” said Evgeny Koshelev, an economist at Rosbank, a Russian subsidiary of Societe Generale.

A run of bullish figures from Rosstat have alarmed some investors, who say data on the Russian economy appears to have become less accurate and more biased towards good news during a long recession fuelled by weak oil market and Ukraine-related Western sanctions.

In month-on-month terms, retail sales surged 7.9 percent in March.

“Today’s figures confirmed that the disappointing batch of data in February were a blip, not the start of a fresh downturn,” research firm Capital Economics said in a note to clients.

Annual inflation slowed to 4.3 percent in March and economists say it is on track to hit the central bank’s target of 4 percent by June.

That easing of price pressures together with a gradual return to economic growth encouraged the central bank to cut its main interest rate by 25 basis points in March.

Some market players expect the bank to cut the rate, currently at 9.75 percent, further at its next meeting on April 28.

“Consumer spending should return to positive growth in the coming months, and GDP growth is also likely to be supported by net trade and a recovery in investment,” Capital Economics said.

The firm said it was sticking to its forecast of 1.5 percent growth in 2017. That is close to an assessment made by the International Monetary Fund but below the economy ministry’s 2 percent target.

Additional reporting by Zlata Garasyuta; editing by John Stonestreet

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