Consumer demand in Russia has experienced steady growth, thanks to higher real wages and a record-low unemployment rate, according to data from Russia’s Tax Service and statistics agency Rosstat. In the third quarter of this year, households in Russia spent 81.9% of their income on goods and services, compared to 79% during the same period last year. This increase in consumer spending is a positive sign for the Russian economy.
Additionally, retail trade turnover in Russia saw a significant boost in September, rising by 12.2% compared to the previous year. This growth surpassed market expectations and reached over 1 trillion rubles (over $44 billion). Retail sales, which serve as a crucial indicator of consumer demand, reached levels not seen since before the West imposed major sanctions on Russia after its expansion into Ukraine in early 2022.
Economists are optimistic about the future of retail turnover in Russia, forecasting a growth rate of 5.2% in 2023. This comes after a 6% decline in 2022. However, experts have warned that consumer activity may start to fade by the end of the year due to rising deposit and lending rates.
Data from Rosstat reveals that the real cash income of the Russian population in the third quarter of 2023 increased by 4.9% when considering inflation. Real disposable income, excluding mandatory payments, also saw a rise of 5.1%. Remarkably, the country’s unemployment rate remains at a record low level of around 3%, despite labor market reports indicating a shortage of workers.
These positive economic indicators indicate a healthy growth trajectory for the Russian economy. With rising consumer demand and increased household spending, businesses can expect a boost in sales. However, the impact of rising rates on consumer activity will need to be closely monitored in the coming months.
In conclusion, Russia’s consumer demand has been on the rise due to factors such as higher real wages and record-low unemployment rates. This has led to an increase in retail trade turnover and retail sales, surpassing pre-sanctions levels. Economists predict further growth in the coming years, although caution is advised as rising rates may impact consumer activity. Nonetheless, these developments bode well for the overall health of the Russian economy.
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