Russia: Consumer confidence plunges in Q4
January 19, 2021
The consumer confidence index, published by the Federal Statistics Service (Rosstat) on 19 December, slumped to minus 26 points in the fourth quarter, from the third quarter’s minus 22 points. As a result, Q4’s reading marked the second-worst result in over four years and remained stuck well below the 0-point threshold, where it has been since Q3 2008, signaling that pessimists continued to clearly outnumber optimists in the Russian economy.
Q4’s broad-based deterioration came amid the reintroduction of certain lockdown measures due to the second wave of the pandemic which weighed on consumer demand and economic activity in general. Consumers’ views of both the country’s current and future economic situation, and their own current and future economic circumstances, worsened at the end of 2020, in turn remaining stuck in negative territory. In a similar fashion, households’ willingness to make big-ticket purchases and the assessment of their ability to save both deteriorated and remained in pessimistic territory in Q4.
Commenting on Russia’s consumer demand metrics, Dmitry Dolgin, chief Russia economist at ING, said:
“A deterioration in consumption is taking place amid a declining savings rate and partly explains the recent announcement of additional social support measures. For 2021, we remain cautious about household activity and ahead of parliamentary elections will be closely watching social support measures and the inflation trajectory.”
Author: Almanas Stanapedis, Research Team Manager