Russian March retail sales expand for 3rd month(69819)

Russian March retail sales expand for 3rd month

Russian retail sales rose for a third month in March as slowing inflation and higher wages boosted household spending.

Sales rose an annual 2.9 percent after a revised 0.9 percent gain in February, the Moscow-based Federal Statistics Service said today in an e-mailed statement. The median forecast of 13 economists surveyed by Bloomberg was for an increase of 2.4 percent. Sales rose 7.9 percent on the month.

Higher incomes and stabilizing unemployment are boosting consumer confidence. The average monthly wage rose 3.4 percent from last March while disposable income was up 4.2 percent on the year. Unemployment was unchanged at 8.6 percent last month.

Domestic demand is finally rebounding, Alexei Moiseev, senior economist at Renaissance Capital, wrote in a note on April 12. These factors raise tentative hopes that the economic recovery in Russia may be based on more than just the export of expensive commodities.

Renaissance Capital raised its second-quarter growth outlook to 8.3 percent from 7.9 percent after domestic demand as well as higher aluminum prices fueled growth. The economy probably grew 7.5 percent in the first quarter, RenCap said.

Higher Shock

Companies had a significantly higher shock than individuals during the crisis as the economy contracted a record 7.9 percent in 2009, German Gref, chief executive officer of OAO Sberbank, the nation s largest lender, said on April 16. Overall, Russian incomes increased somewhat last year because government pensions rose, Gref said.

Service industries expanded in March at the fastest pace since October, signaling a renewed momentum, according to VTB Capital s Purchasing Managers Index.

Ikea, the world s biggest home-furnishings retailer, said on April 14 it may build another shopping center outside Moscow. OAO Magnit, Russia s second-largest food retailer, said this month March sales rose 31 percent to 17.8 billion rubles as it opened 47 stores, raising the total to 3,318 outlets.

The credit portfolio of Russian banks excluding Sberbank expanded about 1.5 percent in March, the first indicator of lending growth this year, according to Sergei Ignatiev, chairman of the central bank. Sberbank cut rates on retail loans and stopped charging commission from April 19 to boost the demand for credit.

The demand from people and companies needs time to recover, Gref said.

Russian March retail sales expand for 3rd month

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