Page 39 - RPTRusFeb17

January’s decline in retail was the smallest since the beginning of 2015, when retail sales figure decreased dramatically from 5.1% y/y in December to -4.4% y/y in January. The recovery came on the back of both food and non-food categories, with the latter contributing the most, printing -1.3% y/y (vs. -5.3% in the previous period). We see three developments at play:
The decline in retail lending in the seasonally weak first month of the year was more moderate than before: -0.4% m/m vs. -0.6% in 2016 and -0.7% in 2015.
● In January, the consumer perception index of the timeliness for making big ticket purchases improved from -21pp to -18pp.
● In January, the government provided a RUB 5k one-time payment to pensioners. That made real disposable income increase up to 8.1% y/y, while in 2016 it oscillated persistently in the red zone (-6.4% y/y in December).
● The persistence of the growth rate in disposable income in the short term is unlikely because the payment was a one off, which might also mean retail sales growth not continuing to improve at the current pace in the coming months in y/y terms.
4.5.4 bne Despair index
Half of Russia's population are at risk of falling into poverty, but the bne IntelliNews despair index is recovering.
In its latest update on Russia the World Bank said some 21.4mn people, or 14.6% of the population, fell below Russia's national poverty line in the first half of 2016, after disposable incomes shrank on average by 5.8%.
Russia’s poverty rate has been creeping up all year from 13.4% in January to
39 RUSSIA Country Report February 2017 www.intellinews.com