(Bloomberg) — Russian retail sales slumped for a third month and real wages plunged the most since 1999, highlighting the discrepancy between improving markets and the plight of the consumer as the economy enters its first recession in six years.
Wages adjusted for inflation fell 9.3 percent in March from a year earlier after an upwardly revised 7.4 percent drop a month earlier, the Federal Statistics Service in Moscow said in a statement Friday. Retail sales fell 8.7 percent, compared with a revised drop of 7.2 percent in February. The median estimates of economists surveyed by Bloomberg were for decreases of 10.3 percent and 8.6 percent.
The deepening downturn belies growing confidence by officials including President Vladimir Putin that the Russian economy has already put the worst behind it. While financial markets are recouping losses suffered last year, currency gains are failing to sustain spending.
“The weakness of activity data is at odds with the increasingly upbeat comments from government officials,” Liza Ermolenko, an economist at London-based Capital Economics Ltd., said in an e-mailed note. “Data for March painted a pretty gloomy picture of the Russian economy.”
Job losses and the fastest inflation in 13 years continue to choke consumption, which accounts for about half the economy, sending sales tumbling at companies from electronics retailer M.video to automaker OAO AvtoVAZ, the producer of Lada cars.