The MNI Russia Consumer Indicator fell to a new low in April as expected household finances, short-term business conditions and the spending climate were all hit from the fallout in Ukraine.
The Consumer Indicator stood at 88.5 in April, having declined sharply to 89.1 in March. This was the third consecutive monthly fall and left confidence almost 11% down since the start of the year as concerns over Russia’s actions in Ukraine have mounted.
Against a backdrop of stagnant economic growth and political concerns, the majority of respondents expected to see a worsening in business conditions in a year’s time. The survey also revealed a deterioration in the labour market, as the Employment Outlook Indicator fell in April, following a record low level in the first quarter.
Consumers were highly dissatisfied with the current level of prices and their expectations for inflation rose sharply. Many respondents found their finances just enough for regular day-to-day expenditure but didn’t have enough to purchase big ticket items.
Commenting on the latest survey, Philip Uglow, Chief Economist of MNI Indicators said, “With the economy flirting with recession it’s not surprising to see sentiment among consumers falling once again to a new low. The situation in Ukraine only makes matters worse and for the time being it’s difficult to see how Russia can turn the economy around.”
“With the central bank forced to tighten monetary policy further to deal with increased inflationary pressures and protect the rouble amid large capital outflows, economic growth will be squeezed further this year,” he added.