The MNI Russia Consumer Indicator increased slightly in December, having hit aseries low in November. Confidence remained weak amid continued concerns over inflation, personal finances and a gloomy business outlook.
The Consumer Indicator stood at 95.7 in December, only 1% above the record low of94.8 seen in November and still below the series average of 97.9. A reading below100 indicates weak consumer confidence.
The rise in consumer confidence was led by a 2.3% monthly gain in the Durable Buying Conditions Indicator, which measures whether respondents think it is a good or bad time to buy a large household good. The latest increase may in part have been due to seasonal effects around the Christmas holiday period.
Optimism about Business Conditions in Five Years also improved in December but remained at a low level, while consumers’ opinion on Business Conditions in One Year fell to the second lowest since records began in March.
Concerns over the price level worsened in December as the number of respondents who were dissatisfied with the current level of prices increased further. One glimmer of hope was seen in inflation expectations. While the majority of respondents continued to report that prices would rise by 11%-24% over the coming year, a growing proportion expected prices to increase by less than 5%.
Commenting on the data, MNI Indicators Chief Economist Philip Uglow said, “It has been a tough year for Russia. In spite of the economic gloom, consumer confidence held up reasonably well until October, but consumer stoicism started to crumble in the last two months of the year as the reality of Russia’s economic predicament has hit home.”
“Some easing in food prices and a possible cut in interest rates at some point may help boost confidence in 2014, although given the current state of the economy it is difficult to see consumer sentiment strengthening significantly.”
