Page 15 - bne IntelliNews Country Report: Russia Dec17

budget revenue will come from oil and gas taxes, compared to 51% in 2014. The budget, based on the fiscal plan, is on course to balance at an oil price of approximately $44 in 2021. It needed $115 in 2013.
All of this compares a lot more favourably with the typical Opec-country model and are powerful reasons why Moscow is today more comfortable with a sustainable price in the $50s than closer to the mid-$60s.
2.6 Ivanovs confidence index still negative but improving
Sberbank Investment Research today publishes its twenty-first survey of the pan-Russian consumer, the Sberbank CIB Ivanov Consumer Confidence Tracker, which monitors consumer spending, savings and confidence trends across the country.
Consumer confidence retreated to -15% in 2Q17 but improved to -12% in 3Q17 demonstrating a positive trend since 4Q15.
A Q-o-Q improvement was seen across all of the index’s individual components, but most notably in the perception of big ticket purchase conditions. We think the brighter sentiment is a reflection of positive real income growth set to come into view in 3Q17 on the back of record low inflation (3.4% on average in 3Q17 versus 4.2% in 2Q17 and 7.0% a year ago). As a result, personal wealth perception over the last 12 months improved to -16% in 3Q17, the best showing since end 2014.
Despite a mild decline in the net hiring index, the unemployment rate among our respondents decreased from 10.9% in 2Q17 to 10.6% in 3Q17, the lowest level since 3Q15. Underemployment (the share of those employed part time but willing to work full time) was 8.9% versus 9.2% in 2Q17 and 8.2% a year ago. The share of respondents mentioning that their companies were hiring new people decreased slightly Q-o-Q but remained high at 9.1% in 3Q17 (versus 9.2% in 2Q17 and 7.5% a year before). The share of those who reported layoffs at their company or workforce attrition edged up Q-o-Q (42.0% in 3Q17 versus 40.7% in 2Q17) but remained well down y/y (47.4% in 3Q16). The net hiring index came in at -33.0% in 3Q17, versus -31.5% in 2Q17 and -40.0% in 3Q16.
The survey indicates that wages rose by 5.5% y/y in 3Q17, slightly below the 6.1% growth that the State Statistic Service recorded. But the official wage statistics do not include information from small companies and those that pay their employees under the table. 29% of Ivanovs got a raise or wage indexation of 6.2% YTD, suggesting 1.8% average increase for the whole sample. If wages are increased, only 20% of this will be allocated toward food (compared with the 38% of income currently spent on food), 13% will be directed toward clothing and household goods (currently 17%) and 12% will be saved (compared with just 7% currently).
The percentage of Ivanovs trying to save on staples decreased Q-o-Q from 71% to 68% in 3Q17 (flat y/y), reflecting the decreasing popularity of spending less on food: shop in cheaper stores with lower prices (down 4 pp q-o-q to 64%), use promo offers more often (down 2 pp q-o-q to 60%), buy less expensive food (down 2 pp q-o-q to 60%). The share of customers coming to the store solely to buy promo items decreased from 48% in 2Q17 to 45% in
15 RUSSIA Country Report December 2017 www.intellinews.com