With the highest rate of unemployment since April this year and with the ruble suffering its lowest fall in over two years, Russia’s retail sales growth came to a virtual standstill.
As per a Federal Statistics Service statement from Moscow, from October last year retail sales rose by 1.7%, while unemployment climbed from 4.9% to 5.1%; tallying with the average estimate conducted by a 16-economist Bloomberg survey. Showing a fall after three months, there was an unexpected decrease of 7% in terms of investment.
What with the fastest inflation rate seen since July 2011 and the ruble’s nose-dive, consumer capital is on unsteady ground. This has become a thorn in the side of domestic demand, which is already afflicted by capital flight, higher interest rates and EU and US sanctions because of the Ukrainian conflict.
According to an estimate published on October 30 by a Bloomber Survey of 27 economists, there is a 70% chance that the next 12 months will witness recession.
Oil, Russia’s chief export earner, fell to its lowest in four years, prompting the central bank to cut the forecast for Russia’s economic growth last week.
A Bloomberg study rates it the worst currency among 170 others worldwide, as it declined by 20% against the dollar over the last three months.
A base-case scenario by the central bank forecasts an expansion of 0.3% for the economy this year, but a stagnation in 2015. This is based on the assumption of a $95 average for oil prices and sanctions still prevailing till 2017 end.