Growing gloom over crisis among Russians does not stop them spending
Over half of Russians believe there will be a second wave of the crisis, while the proportion believing the turmoil will not continue has halved, according to research from local analysts Romir Research Holding.
Some 56% of the 1,500 people that participated in the study believe we can expect a second round of the current crisis to hit in the near future-3% more than expected this last year.
At the same time, the proportion of respondents that do not expect the crisis to continue has almost halved from last year, to 13% from 25%.
Despite the generally negative outlook, consumer confidence in Russia has not suffered, according to the country’s Levada Centre, an independent research centre. Their consumer index has remained at a relatively constant level since last December.
Consumption levels in Russia remain high, according to reports by the World Bank. Consumers have indicated that now is a good time to make large purchases. This continuing demand is driving economic growth.
Preliminary estimates by the State Statistics Service show that Russia’s GDP climbed 4% in the second quarter, even as growth in Europe and other global regions slows to below 1%.
Fund managers are picking up on the consumption story, keen to buy into companies serving the Russian consumer. Last week, East Capital revealed the launch of a fund focused on Russian domestic growth.
Aivaras Abromavicius (pictured), partner and senior adviser at East Capital, said: “There is a lot of upside potential in companies serving the Russian domestic consumer. Domestic-oriented stocks have outperformed in the last three/four years.”
Romir comments: “It seems that waiting for the crisis for the fourth year in a row has dulled down the vigilance and prudence of the Russian consumer.”
This year 6% of the survey participants expect the new wave of crisis to have no effect on the lives of the Russian public, 4% more than last year. At the same time the proportion of respondents expecting the crisis to have a detrimental effect on all areas of life, including prices and job cuts, has almost halved since last year, from 45% to 28%.
Alesya Brossard, financial specialist serving Russian private clients in Switzerland, said: “Many financial specialists now believe the crisis no longer exists. A crisis lasts two or three years, this is a new type of economy.”