Page 26 - RusRPTNov19

2.14 Russian business and consumer confidence
Russia retained its position in the World Economic Forum’s global competitiveness report this year, occupying 43rd place . Macroeconomic stability supported Russia’s standing in the ranking. Having overcome a recession, reduced inflation to 4%, and achieved stable public investment, Russia climbed 12 positions in macroeconomic indicators. However, Russia fell significantly in indicators characterizing the investment climate. The report’s authors note that organized crime and corruption have increased, the police have become less reliable, property and intellectual rights are less protected, and businesses face higher regulatory burdens.
Russian consumer confidence improved in the third quarter rising from -15 to -13, while business confidence slipped falling from -2 to -3, according to Rosstat.
Russian businesses have been pretty optimistic all year with the Rosstat index hovering at -1 and -2 fro most of the year. but it began to creep up in the autumn. However, this seems to be a seasonal phenomena as business confidence was pretty strong in 2018 before deteriorating sharply in he last two months of the year to -6 and -8 respectively. In relative terms businesses seem more optimistic about the future than they did last year – an assumption that is backed up by the last PMI manufacturer’s survey.
Russia’s consumers have been far more depressed than businesses and confidence fell to a low of -17 in December last year but has been picking up slowly all year, although it remains at depressed levels.
Russian consumers are weighed down by six years of falling real incomes, which is reflected in the poor retail turnover numbers. However, the latest Watcom shopping index shows that retail sales in the capital and other large cities is picking up and is now ahead of the 2018 results. Moreover, real
26 RUSSIA Country Report November 2019 www.intellinews.o