In keeping with the baseline assumption, the lower spending on durable consumer goods in Russia declined further in September (-10.9% yoy vs. -8.3% yoy in August). However, its effect on retail sales was far stronger (-10.4% yoy, SG: -8.9%, CNS: -9.1%) as a solid contraction in real income was exacerbated by a switch in expenditure behaviour.
While a spike in rouble volatility towards the end of the summer was helpful for sales in the previous month, it pulled consumption rapidly down straight after, says Societe Generale. While 2014 saw a couple of similar effects, none drove a sustained recovery in the economy. That said, September provided another indication of morose consumer demand, which could curb our projected economic recovery trajectory.
