Page 18 - RUSRptSept18

Overall, retail spending has done better and gathered pace in the summer months, which highlights the structural shift from malls to computers.
Retail sales growth came in at 3.0% y/y in June, according to Rosstat – the best performance since December 2014. Consumers are benefiting from lower inflation, looser monetary policy and improving labour market conditions.
The improved demand was also not reflected in industrial production , which disappointed, slowing from 3.7% y/y in May to 2.2% y/y in June – below the consensus expectation of 3.2% y/y. That was driven by a marked slowdown in manufacturing output growth. The manufacturing PMI also slowed in June for the third month in a row .
But the bigger picture is that Russia’s economy strengthened over second quarter as a whole, according to Capital Economics. Its growth tracker suggests that GDP growth accelerated from 1.3% y/y in the first quarter to around 2.5% y/y in the second, the analysts said in a recent note. “If that’s correct, it would be the joint-best performance since 2012,” Capital Economics commented.
2.10 Russian business and consumer confidence
A mixed result for business confidence which fell one point in August to -3 after being steady at -2 for five months. The threat of new US sanctions are weighing on sentiment as it became clear in the summer that growth this year will be slower than expected.
The dip in confidence was also reflected in the manufacturing PMI which has fallen for the last two months.
18 RUSSIA Country Report September 2018 www.intellinews.com