Consumers under major strain in Russian regions, industries struggle

BOFIT Viikkokatsaus / BOFIT Weekly Review 2015/19

Russia has experienced a nationwide slump in private consumption. In the first quarter of this year, the volume of retail sales, a focal indicator of consumer purchasing power, showed on-year declines in all eight of Russia’s federal districts. Decreases were almost as large or larger than in the crisis year 2009.

Retail sales last year shrank in 15 of Russia’s 83 administrative regions. Conditions have continued to degrade this year. In the first quarter of 2015, retail sales fell on-year in 73 regions, with drops greater than 10 % registered in 18 regions. The biggest drops were registered in Murmansk Oblast, the Republic of Tatarstan and Novosibirsk Oblast.

The slight first-quarter decrease in industrial output was not distributed evenly across Russia. Output fell most sharply in the Central Federal District, where the drop in output was 10 % y-o-y. The district includes the Moscow Oblast, which saw a drop of 23 %, the City of Moscow (down 15 %) and the Kaluga Oblast (down 7 %), famous for its car-manufacturing cluster. The biggest output drop in the Northwestern Federal District was seen in St. Petersburg (down over 7 %). In all other federal districts, output was essentially unchanged.

Change in retail sales volumes in federal districts and Russia’s biggest cities, % y-o-y, 2007–1Q2015
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Source: Rosstat

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