Page 13 - bne IntelliNews Russia Country report May 2017

The Watcom index contradicts the trend in the country-wide retail sector where the 14-month decline in retail turnover finally came to an end in April, printing a no change in sales volume month-on-month.
The other income indicators have also be improving . Nominal wages have been rising through out the last two years, but wage rises only started to beat inflation since August last year. Real wage increases are not strong but were up 2.5%in April and the expectation that inflation will continue to fall this year – it was 4.1% in April, just a tick above the Central Bank of Russia (CBR) target of 4% for the year – means real wages will continue rising.
The last of the triumvirate of income numbers is real disposable income (inflation adjusted income after food and utilities are subtracted) is still in the red and surprised by falling heavily in April, down 7.6% vs the much more modest 2.5% fall a month earlier. Economists are not sure what was behind the steep fall in real disposable income in April but still expect this number to go positive in the second half of the year at which point consumption should return as a modest driver of growth.
Still, despite this optimism this month’s Watcom shopping index must come as a disappointment for the leading malls and stores . So far this year has been worse for sales in the Russian capital than any year since 2014 and is getting worse.
2.6 Putin & government’s popularity
13 RUSSIA Country Report May 2017 www.intellinews.com