The population is preparing for the autumn of consumption
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Rosstat data on income and consumer activity of the population in July-August 2023 record their continued growth. The Ministry of Economy believes that the total volume of consumer spending (the sum of the turnover of retail, catering and services) in August increased, as a month earlier, by 9.5% in annual terms (according to the Center for International Economic Relations, by 9.3%, as in June— July). Estimates of the intra-annual dynamics of consumer spending by analysts from the ministry and the center still differ markedly. The Ministry of Economy believes that, excluding seasonality, the figure for August increased by 0.9% (0.8% in June) against the backdrop of a slight acceleration in spending on goods while spending on services and catering slowed down. TsMAKP believes that in August, taking into account seasonality, consumer spending increased by 0.3% due to non-food goods and services after a slowdown of 0.1% in July.
The main incentives for a noticeable increase in consumption in the summer remained rising inflation, the depreciating ruble exchange rate and the expected decrease in the availability of loans, which became the reason for the strong acceleration of lending in the end (see Kommersant on September 25). The Ministry of Economy still considers the situation on the labor market to be stable, noting a year-on-year increase in real wages of 13.9% in July (14.1% in June) and a historical low in unemployment of 3%. The Center for Administrative and Social Development recorded a decrease in real wages, taking into account seasonality, in July by 0.5% compared to June (an increase of 0.3% a month earlier, when bonuses and premiums were accrued). The income proxy (salaries plus pensions) decreased by 0.2% in July after a decline of 0.6% in June. “In August, wages are unlikely to grow according to the trend. And the growth in the number of employed people has stopped along with the slowdown in wage growth. The decline in the number of unemployed has reached its limit and will reverse by the end of the year,” notes center analyst Igor Polyakov.
Against this background, due to rising inflation and tightening monetary policy, the Central Bank records a decline in consumer sentiment of citizens in September to the level of February 2023 (see chart) due to assessments of all components of expectations and the current situation of respondents. As rates rose, respondents’ propensity to save also increased. The share of respondents who prefer to save rather than spend free money on expensive goods increased to 53.2% (plus 1.5 percentage points by August). The share of those who prefer to spend decreased to 28.4% (minus 3.6 percentage points by August).
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