The instability of the Chinese economy and sharp falls in the oil prices to 30$ per barrel (the lowest since 2004) have worsened the economic outlook for Russian economy in 2016, as it tries to emerge from the current recession. Low oil prices will slow down the economic recovery of Russia, while the turmoil on the Chinese stock markets has raised fears that Chinese economic growth which previously powered commodity prices, could decline faster than expected. The World Bank economic forecasts Russian economy to shrink by 0.7% in 2016.
The economic recession is having a negative effect on Russian consumer confidence. Nielsen’s Survey noted that significantly more people (79% of all respondents) believe that the country is in recession after Q3 of 2015, 14% more than after Q2. 68% of the respondents confirmed that they prefer to save instead of spend, since the start of the recession. Of the consumers that do spend money, the break-down is the following: 38% buy clothes, 33% spend money on annual holiday, 32% spend on out-of-home entertainment. 26% invest into home improvements and 16% - on new technology.
In November 2015, real wages in Russian were 9% lower compared to 2014 while real disposable income declined by 5.4%. Inflation was 15% year-on-year in November 2015.Ђ Back to journal