In the aftermath of a negative surprise on Russia's retail sales both in food and non-food components in April. Muted growth in nominal income, stall speed in retail credit growth and unprecedented price growth that pressured the consuming-saving behaviour of the average consumer since the start of 2015 remain intact.
In May some relief for consumption could come from prices as food and, to a lesser extent, nonfood, prices gained support from the stronger ruble (-8.3% in April-May against EUR-USD currency basket).
At this juncture, a small slowdown in consumption contraction on a trailing basis is expected (to -5.0% 3m/3m sa from -5.1% 3m/3m in April and -4.9% 3m/3m sa in March), however, the headline figure will likely slide further to -10.4% yoy, says Societe Generale.
