Page 16 - RusRPTOct21

formation of a price trajectory at a lower level in the medium-long term," the Ministry of Finance stipulates.
At the end of December,rent oil quotes touched $80 per barrel, and gas in the European direction approached $1200 per thousand cubic meters, which is already over $150 in oil equivalent. With the rapid rise in energy prices, each time there is a mirage of "oil at $100", and investmentanks and traders quickly revise their forecasts. It is possible that in the coming year the coveted mark will even be reached, and Russia will be among the beneficiaries of growth. but in the long term, the transition to "oil at $25" looks more likely. The main thing to remember is that the energy transition does not at all exclude periods of very high energy prices and will cause the most unexpected geopolitical and country effects.
2.7 Watcom shopping index back to normal,but inflation fears are high
The Watcom Shopping index that measures foot traffic in Moscow’s leading malls in real time, has returned to normal as Russia’s economy finds a new equilibrium following last year’s crisis, however, inflation remains aig concern.
The index rose to 425 in week 34 (August 14-22), which was only 4.5% down on 2019, the last year of strong growth, and up 2.6% on the same week last year, when the retail sectorouncedack after the lock down restrictions were removed.
However, the results comes as the Russian economy is going through a correction after the bounce back-overshoot following 10.3% GDP growth in the second quarter of this year – a record.
After crashing last year when all the stores were simply shut down, retail rebounded in the second quarter of this year to a peak of 35.1% year-on-year growth in April. Since then the growth in sales has fallen off dramatically as the lowase effect, caused by the lockdowns, wears off. In July retail growth was 4.7% year-on-year, a more normal rate – a result confirmed by the Watcom index that simply measures the volume of foot traffic in Moscow’s leading shopping malls by using 3D technology to count the number of shoppers in real time.
Within the retail sector food sales were hurt worse, growing by only 1.8% year-on-year in July whereas non-food sales were more robust, expanding by 7.4%.
“The growth in retail sales slowed to 4.7% y/y,elow our (5.2% y/y) and market (5% y/y) expectations after reaching 10.9% y/y in June, 27% y/y in May and 35% y/y in April. Non-food sales supported the 7.4% y/y rise in the headline rate, while food sales slowed to 1.8% y/y. On a SA MoMasis, retail sales were flat, draggedy the contraction in the non-food segment (-0.5% SA MoM) for the second month in a row. Services consumption also turned negative on an SA
16 RUSSIA Country Report October 2021 www.intellinews.com