Page 38 - bne IntelliNews Russia Country report May 2017

Contrary to the robust recovery in wages, real disposable incomes deteriorated. The scale of the decline was -7.6% y/y. Such deviations are common and the reason is one or both of the following:
i) opposite trends in real wages and other components of households’ monetary income (social payments, income from interest or assets);
ii) an artefact of the disposable income early estimation procedures. Currently, wages constitute 65% of households’ monetary income, with another 19% being social payments and 8% from entrepreneurial income. The decline in real social payments, or the moderation in the profits rates, might have been responsible for the widening gap between real wages and disposable incomes.
The average household currently saves about 10% of its monetary income, just 1.0-1.5pp higher than the average in 2011-13. This means that further improvements in household confidence are likely to promote a recovery in consumption, but the scale of this effect is currently limited.
4.5.3 Retail sector dynamics
Retail sales turnover was flat year on year, the best print since 4Q14 and yet another improvement. Retail sale growth now goes into the black.
Non-food retail turnover rises +0.9% y/y, food sales still in the red at -1.0% y/y.
The revised real wage growth estimate for March stands at 3.2% y/y, beating an even longer standing benchmark from 1Q14, according to Rosstat’s first tier data for April.
Overall, the report adds evidence of a, if not universal, then broad-based pick-up in economic activity. This means that while there is the space for further monetary easing, the urgency might be subsiding.
38 RUSSIA Country Report May 2017 www.intellinews.com