MNI Russia Consumer Report September 2013

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The MNI Russia Consumer Sentiment provides reliable and in-depth analysis of consumer behaviours within the rapidly changing Russian economy. We provide timely intelligence on the state of an important strategic market.

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MNI Russia Consumer Report September 2013

  1. 1. MNI Russia Consumer Report September 2013 Insight and data for better decisions
  2. 2. 2 MNI Russia Consumer Report - September 2013 About MNI Indicators Insight and data for better decisions MNI Indicators offers unique macro-economic data and insight to businesses and the investment community. We produce data and intelligence that is unbiased, pertinent and responsive. Our data moves markets. Written and researched by Philip Uglow, Chief Economist Lorena Castellanos, Economist Shaily Mittal, Economist Specialising in business and consumer focused macro-economic reports, we give our customers the ability to make timely and relevant decisions. We strive to provide up-to-date information on business and consumer confidence on the economy. MNI Indicators | Deutsche Börse Group Westferry House 11 Westferry Circus London E14 4HE Tel: +44 (0)20 7862 7444 Email: info@mni-indicators.com MNI Indicators publishes data on a monthly basis. Our indicators are based on a unique and proprietary methodology and are designed to present an advance picture of the economic landscape as perceived by businesses and consumers every month. www.mni-indicators.com support@mni-indicators.com @MNIIndicators Our monthly reports explore attitudes, perspectives and confidence across different countries and regions. They deliver in-depth analysis, highlight changing patterns and how these can affect potential developments in business and consumer activities. MNI Indicators is part of MNI, a leading provider of news and intelligence. MNI is a wholly owned subsidiary of Deutsche Börse Group, one of the largest worldwide exchange organisations. Copyright© 2013 MNI Indicators | Deutsche Börse Group. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved.
  3. 3. MNI Russia Consumer Report - September 2013 MNI Russia Consumer Report - September 2013 Contents 4 Editorial 6 Executive Summary 12 Economic Landscape 16 Indicators 17 MNI Russia Consumer Indicator 25 Personal Finances 27 Business Conditions 31 Durable Buying Conditions 32 Employment Outlook 33 Prices Sentiment 36 Interest Rates Expectations Indicator 37 Real Estate Investment Indicator 40 Car Purchase Indicator 42 Consumer Indicator - Regions 45 Consumer Indicator - Income Groups 46 Data Tables 54 Methodology 3
  4. 4. 4 MNI China Consumer Report - July 2013 So Far, So Good Credibility is everything in central banking and so far the newly appointed governor of Russia’s central bank, Elvira Nabiullina, seems intent on not losing hers.
  5. 5. MNI Russia Consumer Report - September 2013 Credibility is everything in central banking and so far the newly appointed governor of Russia’s central bank, Elvira Nabiullina, seems intent on not losing hers. When Nabiullina took over the reins at Bank Rossii in June, accusations flew that she was a stooge appointed by President Putin, with growth flagging there has been growing pressure from within the Kremlin to find ways to boost the economy. She also has some big shoes to fill. Her tenure follows that of monetarist Sergei Ignatiev, former “best European central bank head”, arch-hawk on inflation and great defender of the bank’s independence. During his 11-year tenure he has been credited with not only curbing inflation but also successfully easing exchange rate restrictions. The contrast with Nabiullina is stark. She was a former economic aide to Putin and also an economy minister and thought to be less of an inflation hawk. Little in her actions to date, though, has suggested she will throw away the hard earned credibility built up by her predecessor. Consumer price inflation rose strongly throughout 2012 and while it looks to have peaked in May 2013 at 7.4% it failed to decline in August as expected from 6.5% and is still above the 5%-6% target range. The Russian Central Bank held the refinancing rate steady at its September gathering with the new governor citing raised inflation expectations as the reason for not cutting rates. Nabiullina added that rates would likely remain unchanged next month barring no change in the current economic trend – no doubt a little disappointing for Putin. Meanwhile, the central bank announced a shake-up of its current monetary policy framework to increase transparency. The current confusing array of rates and instruments will be streamlined, with the existing one week repo rate, which currently stands at 5.5%, to be known as the ‘key rate’. And playing catch up with other central banks, it is also planning to publish a schedule of future monetary policy meetings as well as pre-announce exactly when changes to monetary policy will be made. And all these steps are a move further down the route to full inflation targeting which would see the ‘key rate’ as the central bank’s main policy tool to control inflation, while the Rouble would be allowed to free float. This should provide some protection from fluctuating oil prices and help improve financial stability. A credible and more transparent monetary framework will not only help to improve the monetary transmission mechanism but will also help limit financial market volatility and garner investor confidence. So far so good for the new governor. Philip Uglow Chief Economist MNI Indicators 5
  6. 6. 6 MNI China Consumer Report - July 2013 Executive Summary After three consecutive rises, the MNI Russia Consumer Indicator declined in September to the lowest level.
  7. 7. MNI Russia Consumer Report - September 2013 After three consecutive monthly rises, the MNI Russia Consumer Indicator declined in September to the lowest level since March when the series started. The Car Purchase Indicator fell almost 3.0% in September to 85.7, having risen to a record high in August of 88.3. The Consumer Indicator fell 2.6% on the month to 97.3 in September from 99.9 in August, below the series average of 98.4. The decline was led by a deterioration in respondents’ personal finances, as a higher percentage of households reported that their financial situation was worse than a year ago. A fall in expected business conditions also contributed to the decline. MNI Russia Consumer Indicator - Components Consumer sentiment worsened in the youngest and oldest of the three main age groups and improved for the 35-54 age range. The indicator which measures opinion on the outlook for the employment market over the next 12 months, increased to 99.9 in September from 97.4 in August, the highest reading since May. Concerns over inflation did not show any signs of easing in September. The Satisfaction with Current Prices Indicator remained stable at 85.6, although up 16.4% from 80.4 in March when the series started. The Interest Rate Expectations Indicator fell to 111.1 in September, down from 113.2 in August and the lowest since March when the series started. The Real Estate Investment Indicator again fell slightly to 108.0 in September from 108.5 in August, but was above the three month average of 107.3. Business Conditions in 5 Years Business Condition in 1 Year Durable Buying Conditions Personal Finance: Expected Personal Finance: Current The Consumer Indicator fell in eight out of eleven regions covered in the survey while it improved only in Far Eastern Russia, Kaliningrad and West Siberia. It also fell in seven out of the ten cities covered in the survey, including Moscow and St. Petersburg, while it improved in Samara, Rostov-on-Don and Nizhny Novgorod. MNI China Consumer Indicator Three out of five components which contribute to the Russia Consumer Indicator fell in September. 7
  8. 8. 8 MNI Russia Consumer Report - September 2013 All Russia - Overview Jul-13 Aug-13 Sep-13 Highest Since Lowest Since 3-Month Average Monthly Change Monthly % Change 99.5 99.9 97.3 - Mar-13 98.9 -2.6 -2.6% 100.5 99.2 95.8 - Mar-13 98.5 -3.4 -3.4% 98.8 100.3 98.4 - May-13 99.2 -1.9 -1.9% Personal Finance: Current 103.2 102.2 95.2 - Mar-13 100.2 -7.0 -6.8% Personal Finance: Expected 103.4 104.8 105.3 May-13 - 104.5 0.5 0.5% Business Condition: 1 Year 95.9 98.6 96.0 - Jul-13 96.8 -2.6 -2.6% Business Condition: 5 Year 97.2 97.5 93.8 - May-13 96.2 -3.7 -3.8% Durable Buying Conditions 97.8 96.2 96.3 - Jul-13 96.8 0.1 0.1% Current Business Conditions Indicator 95.3 95.5 97.7 - Jun-13 96.2 2.2 2.3% 105.3 108.5 108.0 - Jul-13 107.3 -0.5 -0.5% Car Purchase Indicator 86.2 88.3 85.7 - series low 86.7 -2.6 -2.9% Employment Outlook Indicator 97.1 97.4 99.9 May-13 - 98.1 2.5 2.6% Inflation Expectations Indicator 136.1 139.4 135.4 - Jun-13 137.0 -4.0 -2.9% Current Prices Satisfaction Indicator 73.8 86.0 85.6 - Jul-13 81.8 -0.4 -0.5% Interest Rates Expectations Indicator 114.1 113.2 111.1 - series low 112.8 -2.1 -1.9% MNI Russia Consumer Indicator Current Indicator Expectations Indicator Real Estate Investment Indicator
  9. 9. MNI Russia Consumer Report - September 2013 All Russia - Summary 2013 Mar Apr May Jun Jul Aug Sep MNI Russia Consumer Indicator 97.1 99.1 97.5 98.5 99.5 99.9 97.3 Current Indicator 93.8 98.2 96.2 98.4 100.5 99.2 95.8 Expectations Indicator 99.3 99.6 98.3 98.6 98.8 100.3 98.4 Personal Finance: Current 94.6 97.5 96.2 99.5 103.2 102.2 95.2 Personal Finance: Expected 109.1 105.3 105.5 102.4 103.4 104.8 105.3 Business Condition: 1 Year 92.0 95.7 96.5 97.6 95.9 98.6 96.0 Business Condition: 5 Year 96.9 98.0 93.0 95.7 97.2 97.5 93.8 Durable Buying Conditions 92.9 98.8 96.1 97.2 97.8 96.2 96.3 Current Business Conditions Indicator 89.7 95.9 95.9 97.8 95.3 95.5 97.7 Real Estate Investment Indicator 111.6 108.5 107.9 107.9 105.3 108.5 108.0 House Price Expectations 135.4 126.6 123.5 122.8 120.7 128.3 121.5 House Buying Sentiment 97.8 98.1 100.3 100.6 96.6 96.7 101.7 House selling Sentiment 98.3 99.1 100.0 99.7 101.4 99.5 99.3 Car Purchase Indicator 85.8 86.2 87.2 87.5 86.2 88.3 85.7 Car Purchase expectations 107.4 104.1 105.4 107.5 101.0 109.3 107.1 Price of Gasoline expectations 135.9 131.8 131.0 132.5 128.6 132.6 135.7 Employment Outlook Indicator 100.2 98.5 100.3 99.1 97.1 97.4 99.9 Inflation Expectations Indicator 130.6 138.3 136.5 133.1 136.1 139.4 135.4 Current Prices Satisfaction Indicator 80.4 76.1 84.2 86.0 73.8 86.0 85.6 Interest Rates Expectations Indicator 120.1 122.0 123.1 112.1 114.1 113.2 111.1 9
  10. 10. 10 MNI Russia Consumer Report - September 2013 All Russia - Records 2013 Minimum Maximum Mean Median MNI Russia Consumer Indicator 97.1 99.9 98.4 98.5 Current Indicator 93.8 100.5 97.4 98.2 Expectations Indicator 98.3 100.3 99.1 98.8 Personal Finance: Current 94.6 103.2 98.4 97.5 Personal Finance: Expected 102.4 109.1 105.1 105.3 Business Condition: 1 Year 92.0 98.6 96.1 96.0 Business Condition: 5 Year 93.0 98.0 96.0 96.9 Durable Buying Conditions 92.9 98.8 96.5 96.3 Current Business Conditions Indicator 89.7 97.8 95.4 95.9 Real Estate Investment Indicator 105.3 111.6 108.2 108.0 House Price Expectations 120.7 135.4 125.5 123.5 House Buying Sentiment 96.6 101.7 98.8 98.1 House selling Sentiment 98.3 101.4 99.6 99.5 Car Purchase Indicator 85.7 88.3 86.7 86.2 Car Purchase expectations 101.0 109.3 106.0 107.1 Price of Gasoline expectations 128.6 135.9 132.6 132.5 Employment Outlook Indicator 97.1 100.3 98.9 99.1 Inflation Expectations Indicator 130.6 139.4 135.6 136.1 Current Prices Satisfaction Indicator 73.8 86.0 81.7 84.2 Interest Rates Expectations Indicator 111.1 123.1 116.5 114.1
  11. 11. GDP Growth hit the lowest in four years... ... Led by contraction in manufacturing, transport and construction.
  12. 12. 12 MNI China Consumer Report - July 2013 Economic Landscape Latest economic data pointed to a further weakening in the Russian economy. GDP growth hit its lowest for four years, industrial production was still down on the year and inflation remained relatively high.
  13. 13. MNI Russia Consumer Report - September 2013 Latest economic data pointed to a further weakening in the Russian economy. GDP growth hit its lowest for four years, industrial production was still down on the year and inflation remained relatively high. In spite of the weakness, the Russian Central Bank held the refinancing rate at 8.25% given the persistent strength of inflation. An announcement in September to move towards an inflation targeting system was welcomed by markets. An average oil price of over $95 per barrel has not been enough to revive an economy harmed by capital outflows, low investment, weak external demand and serious structural failures. Given the current weakness, there are growing expectations that the Russian government will provide some stimulus. Amid the economic slowdown, the Moscow mayoral election result potentially opens a window to further political changes in this country. Growth outlook worsens Forecasts for growth were revised lower following the release of the weaker than expected second quarter GDP data and the continued weakness of external demand and investment. GDP rose just 1.2% compared with a year ago in the second quarter, the lowest annual growth rate since the 2009 crisis, and down from 1.6% in the first quarter. A contraction in the manufacturing, transport and construction sectors all reduced GDP in the second quarter. Following the weak GDP figures, the Russian Economy Ministry cut its forecast for 2013 economic growth to 1.8% from 2.4%. The forecast for 2014 was also revised down to a range of 2.8%-3.2% from 3.7% previously. Refinancing interest rate unchanged The central bank of Russia held the refinancing rate steady at 8.25% where it has remained since June. Markets expect the rate to remain unchanged at the next monetary policy meeting on October 14. Bank officials have suggested that the refinancing rate will not be cut until inflation falls within the target range of 5%-6%. The interest rate for overnight loans and one-day loans, however, was cut to 6.5% in September. The maximum interest rate on one-week deposit auctions was raised to 5.5%. In September, the Central Bank announced its intention to simplify its monetary policy instruments and move towards an inflation targeting system. This decision was welcomed by the markets as it included the introduction of a Bank of Russia “key rate“. GDP Growth 15 10 Construction output fell by 3.9% on the year following a rise of 0.4% in the first quarter, while manufacturing contracted 1.2% compared with a year ago after expanding 1.3% in the first quarter. Transport, storage and communications contracted 0.1% compared with a year ago. In contrast, mining and quarrying output posted a 1% rise on the year, following a 4.9% decline in the first quarter. 5 0 -5 -10 -15 Separate trade data showed that exports were weak during the first and second quarters but recovered in July, rising 5.5% compared with a year ago after six months of negative annual growth. 2007 2008 2009 2010 2011 GDP y/y % Source: Federal State Statistics Service of Russia 2012 2013 13
  14. 14. 14 MNI Russia Consumer Report - September 2013 Consumer price inflation steady while producer prices accelerated Consumer price inflation remained stable at 6.5% in August, still above the Russian central bank’s 2013 target range of 5%-6%, but below the peak of 7.4% reported in May. Food prices increased at a slower pace in August but gasoline prices and other regulated prices increased at a higher rate. Weak investment and ongoing capital outflows In August, weak investment and weak external demand were highlighted by the Russian Central Bank as key risks to the Russian economy. Investment levels have continued to decline in 2013, with gross fixed capital formation down 1.3% in the first quarter compared with the fourth quarter and some 13.3% below levels in the same quarter in 2012. Russia’s central bank remains confident that inflation will decline by the end of 2013, aided by a good harvest and a lack of significant demand-side inflationary pressures. In August fixed capital investment fell by 6.2% compared with July and was down 10.9% on the year, following 13 consecutive months of negative annual growth. In early September, the President of Russia decided to freeze utility tariffs for next year in an attempt to fight inflation and boost the economy, which will have a significant downward impact on inflation next year. Fixed Capital Investment Weakens 50% In August, producer prices rose 2.8% compared with July, driven by higher prices in the mining and utilities sectors. This was the largest monthly gain since September 2012. In spite of the monthly leap, annual producer price inflation fell to 4.7% in August, from the 7.1% rate seen in July. 40% 30% 20% 10% 0% -10% -20% -30% Inflation Steady in August -40% 2007 2008 2009 2010 2011 2012 2013 16% 14% Fixed Capital Investment y/y % Source: Federal State Statistics Service of Russia 12% 10% 8% 6% 4% 2% 0% 2007 2008 2009 2010 2011 2012 2013 The Russian government announced in June an investment plan of around $13 billion to construct roads and railways. It also continued to negotiate big infrastructure projects with China in the gas sector. These include a $10 billion investment of PetroChina in Siberian gas fields. Other large infrastructure investments are being planned as part of the Far East development plan proposed by the government. CPI Growth y/y % Source: Federal State Statistics Service of Russia Russia was already seeing investment seeping out of the economy before the emerging markets were hit by
  15. 15. MNI Russia Consumer Report - September 2013 expectations the US Federal Reserve would likely start tapering its bond purchases this year. Foreign Direct Investment in Russia fell considerably in the first quarter to minus $26.5 billion dollars, well below $1.5 billion seen one year ago and $6.2 billion reported in the fourth quarter of 2012. This result was mainly due to a dramatic drop in equity capital investments received from abroad. They stood at -$60.3 billion in the first quarter of this year, compared with -$13.9 billion in the fourth quarter of 2012. Industrial production down Industrial production rose a non-seasonally adjusted 0.5% on the month in August but was down 0.1% on the year, after a 1.2% monthly rise in July and a fall of 0.8% on the year. Industrial Production - Main Sectors 15 10 5 0 -5 -10 -15 -20 -25 2008 2009 2010 2011 2012 2013 2012 2013 Mining and Quarrying Manufacturing Mining and quarrying production recovered in August, increasing 2% compared to a year ago after rising only 0.4% in July. Manufacturing remained weak, posting an annual drop of 0.2%, although up from the 1.5% decline seen in July. Utilities production decelerated further in August, falling 2% on the year, slightly down from a fall of 1.8% in July. Industrial production was already expanding at a slower pace before 2009, when the crisis hit the Russian economy through lower commodity prices and weaker external demand. After a partial recovery, industrial output has trended downward since mid2011. Utilities Source: Federal State Statistics Service of Russia Industrial Production Falling 15% 10% 5% 0% -5% -10% -15% -20% 2008 2009 2010 2011 Industrial Production Annual Average Industrial Production y/y % Source: Federal State Statistics Service of Russia 15
  16. 16. 16 MNI China Consumer Report - July 2013 Indicators The Consumer Indicator fell 2.6% on the month to 97.3 in September from 99.9 in August, below the series average of 98.4.
  17. 17. MNI Russia Consumer Report - September 2013 97.3 MNI Russia Consumer Indicator Lowest since March After three consecutive monthly rises, the MNI Russia Consumer Indicator declined in September to the lowest level since March when the series started. The Consumer Indicator fell 2.6% on the month to 97.3 in September from 99.9 in August, below the series average of 98.4. Since the series started in March 2013, the indicator has remained broadly stable ranging between 97 and 100. A reading below 100 indicates that consumer conditions are weaker than a year earlier while a figure above 100 shows an improvement. The decline was led by a worsening in respondents’ personal finances, as a higher percentage of households reported that their financial situation was worse than a year ago. A deterioration in expected business conditions also contributed to the decline. Both current and future measures fell in September. The Current indicator decreased 3.5% on the month to 95.8 in September, the lowest reading since March and the second consecutive monthly fall. The Expectations indicator fell 1.9% on the month and moved back below 100 to 98.4, the lowest reading since May 2013. August was the only month in which the indicator was above 100. Three out of five components which contribute to the Russia Consumer Indicator fell in September. MNI Russia Consumer Indicator 105 100 95 90 85 80 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Consumer Indicators Stable but Below 100 105 100 95 90 85 80 The 0.5% improvement in the Expected Personal Finances component to 105.3 in September and a 0.1% increase in Durable Buying Conditions to 96.3 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Current Expectations MNI Russia Consumer Indicator Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 MNI Russia Consumer Indicator 97.1 99.1 97.5 98.5 99.5 99.9 97.3 Current 93.8 98.2 96.2 98.4 100.5 99.2 95.8 Expectations 99.3 99.6 98.3 98.6 98.8 100.3 98.4 17
  18. 18. 18 MNI Russia Consumer Report - September 2013 All Russia West Siberian 98.4 97.3 90.5 95.8 86.5 80.5 Total Indicator Current Indicator Expectations Indicator Central Russia 102.9 Total Indicator Current Indicator Expectations Indicator Volga 101.9 103.6 99.5 93.8 85.2 Total Indicator Current Indicator Expectations Indicator Urals Total Indicator Current Indicator Expectations Indicator North Caucasus 103.2 97.5 99.1 96.4 93.7 87.9 Total Indicator Current Indicator Expectations Indicator Total Indicator Current Indicator Expectations Indicator
  19. 19. MNI Russia Consumer Report - September 2013 were not enough to compensate for the 6.8% decline in Current Personal Finances, which fell below 100 to 95.2 in September. Consumer Indicator: Contribution to Monthly Change (% pt.) A 2.6% drop in Business Conditions in a Year‘s time to 96.0 in September and a 3.8% decline in Business Conditions expectations in five years to 93.8 in September also contributed to the overall decline in consumer confidence. 0.0 Regions The fall in the MNI Russia Consumer Indicator was led by a sharp decline in consumer confidence in East Siberia and North Caucasus where the Consumer indicator fell 7.6% and 6.3% respectively. The Consumer Indicator fell in eight out of eleven regions covered in the survey while it only improved in Far Eastern Russia, Kaliningrad and West Siberia. The latter saw a marked increase of 12% from 77.2 in August to 86.5 in September. The September reading was above the 100 breakeven only in Central Russia. Among the top 10 cities covered in the survey, consumer confidence deteriorated in seven cities including Moscow and St. Petersburg, while it improved in Samara, Rostov-on-Don and Nizhny Novgorod. In Moscow, the total indicator fell 5.2% on the month to 101.4 in September, posting the lowest reading since April 2013 but remaining above 100. Age Business Condition: 1 Year -0.5 0.1 -1.4 The MNI Russia Consumer Indicator improved slightly from an average of 98.3 in the second quarter to 98.9 in the third quarter driven by a 2.5% rise in Current Personal Finances. Business Condition: 5 Year -0.8 Expected Personal Finances was the only indicator above the 100 breakeven point while Current Personal Finances posted the lowest reading since March 2013. Durable Buying Conditions Personal Finance: Expected Personal Finance: Current 19
  20. 20. 20 MNI Russia Consumer Report - September 2013 Consumer sentiment worsened in the youngest and oldest of the three main age groups and improved for the 35-54 age range. Consumer Indicator: Age Groups 97.5 The overall Consumer Indicator for the 18-34 age range fell 6.4% to 97.3 in September, the lowest reading since May 2013 and the first time below 100 in three months. The decline was led by a sharp fall in Current Personal Finances and Business Conditions in a Year’s Time. 97.3 97.3 96.7 Since June confidence had been highest among 1834 year olds. For the 35-54 age range, consumer confidence improved 3.0% on the month to 97.5 in September driven by a sharp improvement of almost 10.0% in Durable Buying Conditions and Business Conditions in a Year‘s Time. For the oldest age group, 55-65, consumer confidence fell 2.1% in the month to 96.7 in September as current conditions deteriorated sharply. Income Consumer confidence improved slightly in September for households with an average income under RUB 480,000 per annum to 98.0 from 97.8 in August, while for households with an annual average income over RUB 480,000, consumer confidence worsened 5.1% on the month with the indicator falling to 96.2. Although on average consumer confidence has been higher among high income households, since the series started in March 2013 consumer sentiment has worsened 4.7% for the high income group while it has improved 1.9% for low income households. All 18-34 35-54 55-64
  21. 21. MNI Russia Consumer Report - September 2013 MNI Russia Consumer Indicator Income Groups < RUB 480,000 Per Annum 99.1 98.0 97.3 Total Current Expected > RUB 480,000 Per Annum 99.0 96.2 92.1 Total Current Expected 21
  22. 22. 22 MNI Russia Consumer Report - September 2013 MNI Russia Consumer Indicator Main Cities The Consumer Sentiment indicator fell in seven out of ten cities, including Moscow and St. Petersburg, while it improved only in Samara, Rostov-on-Don and Nizhny Novgorod. The overall consumer indicator was over the 100 breakeven level in Moscow, Samara and Kazan. Consumer Indicator - Moscow 110 105 100 Moscow, the capital of Russia, remained the most optimistic city and the only one with a series average over 100. However, in September consumer sentiment fell sharply to 101.4 from a series high of 107.0 in August. The decline in consumer sentiment was driven by a 13.2% fall in Business Conditions in a Year. Only Durable Buying Conditions and Expected Personal Finances improved, but just slightly. Current conditions fell 6.5% on the month to 103.4 in September from 110.5 in the previous month, while the Expectations Indicator decreased 4.3% to 100.1 from 104.7. 95 90 85 80 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Consumer Indicator Components - Moscow 110.8 Consumer sentiment also declined in Saint Petersburg, the second largest city of Russia, with the indicator falling below the 100 breakeven to 98.0 in September from 102.2 in August. A large drop in Current Personal Finances and Business Conditions in a Year led the decline, but was offset by a 9.5% improvement in Durable Buying Conditions and a small rise in Business Conditions in Five Years. 108.1 103.4 100.1 98.7 96.5 93.1 In Novosibirsk, the third most populous city in Russia, consumer sentiment declined 3.9% on the month to 99.9 in September from 103.9 in August. Although the overall indicator fell below the 100 breakeven, it remained above the series average of 99.0. Buying Conditions led the improvement. Among the three major Russian cities, Novosibirsk was the only one that saw an increase of the Current Indicator which stood at 107.0 in September, up from 104.7 in August. A 5.8% monthly rise in Durable On the contrary, the Expectations indicator in Novosibirsk fell 8.0% on the month to 95.1 from 103.3 in August, following a decline in all three of its components. Current Indicator Expectations Indicator Personal Finance: Current Personal Finance: Expected Business Business Condition: 1 Condition: 5 Year Year Durable Buying Conditions
  23. 23. MNI Russia Consumer Report - September 2013 Consumer Indicator - Saint Petersburg Consumer Indicator - Novosibirsk 120 110 115 105 110 105 100 100 95 95 90 90 85 80 85 75 70 80 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Consumer Indicator Components - Saint Petersburg 94.5 Expectations Indicator Personal Finance: Current 103.1 Personal Finance: Expected Business Business Condition: 1 Condition: 5 Year Year Durable Buying Conditions Jul-13 Aug-13 Sep-13 Consumer Indicator Components - Novosibirsk 107.0 95.1 90.5 85.9 Current Indicator 107.0 103.6 100.4 Mar-13 Apr-13 May-13 Jun-13 Current Indicator Expectations Indicator 102.1 Personal Finance: Current 112.0 100.3 Personal Finance: Expected 93.6 91.4 Business Business Condition: 1 Condition: 5 Year Year Durable Buying Conditions 23
  24. 24. Concerns about Future Business Conditions worsened... ... Possibly due to weak growth in the second quarter and the government‘s revised GDP forecast.
  25. 25. MNI Russia Consumer Report - September 2013 95.2 Personal Finances Back Below 100 While expectations about personal finances in a year improved slightly, the current financial situation fell sharply in September with the indicator posting the lowest reading since March. Personal Finances 120 The Current Personal Finances Indicator, which measures whether the financial situation of a household is better, the same, or worse than a year ago, had trended upwards since March 2013 but has fallen in the past two months. After two months above 100, September saw a 6.8% monthly drop to 95.2 from 102.2 in August. 110 The percentage of respondents who reported that their current financial situation improved compared with a year ago fell from 30.6% in August to 20.6% in September. Those reporting financial conditions were the same as last year increased slightly to 46.3% from 42.2% in August, while those reporting a worsening increased to 30.0% from 26.3% in the previous month. 80 100 90 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Current Expectations Current Financial Situation Compared with 1 Year Ago (% of Households) 0.1 Expected Personal Finances, which measures whether households think their finances will be better in a years’ time, have risen since June, when the indicator posted its lowest reading since the series began. September saw a marginal increase of 0.5% to 105.3 from 104.8 in August. The percentage of respondents reporting they expected their financial situation will improve in a years’ time remained broadly unchanged at 15.4% while the percentage of respondents reporting that they expect their financial situation will be the same fell from 76.0% in August to 74.6% in September. 3.1 20.5 29.9 46.3 Much Better Same Much Worse A Little Better A Little Worse Don‘t Know/No Answer Personal Finances Mar-13 Current Expectations Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 94.6 97.5 96.2 99.5 103.2 102.2 95.2 109.1 105.3 105.5 102.4 103.4 104.8 105.3 25
  26. 26. 26 MNI Russia Consumer Report - September 2013 How Households Spend their Money Daily Expenses (% of Households) Monthly Household Income Used for Large Loan Repayment (% of Households) 0.9 3.5 8.2 96.4 90.9 0% - 29% of Income 50% - 69% of Income 0% of Income 30% - 49% of Income 30% - 49% of Income 70% - 100% of Income 1% - 29% of Income 50% - 100% of Income Monthly Household Income Used for Savings (% of Households) Monthly Household Income Used for Investments (% of Households) 1.1 5.0 52.9 47.1 93.8 0% of Income 30% -49% of Income 0% of Income 30% - 49% of Income 1% - 29% of Income 50% - 100% of Income 1% - 29% of Income 50% - 100% of Income
  27. 27. MNI Russia Consumer Report - September 2013 97.7 Business Conditions Current Conditions Improved Perceptions about the current state of business improved in September, while concerns about the future worsened, possibly due to a lack of confidence in the government’s long term reform policies, weak growth seen in the second quarter and the lower GDP forecast announced by the government in August. Current Business Conditions Indicator Improves 100 98 96 The Current Business Conditions Indicator, which measures respondents’ views on the state of business compared with a year earlier, rose 2.3% on the month to 97.7, close to the record high June reading of 97.8. While it has remained below the 100 breakeven mark, it has been on an upward trend since its inception. 94 92 90 88 In September, the proportion of survey respondents who believed that business conditions were “good” increased marginally from 5.1% in August to 5.9% in September. There was a small increase in respondents who believed that business conditions were only “fair” to 80.9% in September, while the proportion of respondents reporting conditions were “poor” fell from 13.5% to 10.2% in September. The rise in the Current Business Conditions Indicator was consistent with the September pick up in the MNI Russia Business Indicator, which expanded to 59.0 in September from 51.3 in the previous month, driven by a strong improvement in the manufacturing sector. Expectations for Business Conditions in a Year worsened, with the indicator falling by 2.6% from 98.6 in August to 96.0 in September. This was led by a rise in number of respondents reporting business would be “worse” in a year. There was also a fall in Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Expected Business Conditions Worsen 100 99 98 97 96 95 94 93 92 91 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 1 Year 5 Years Business Conditions Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Current 89.7 95.9 95.9 97.8 95.3 95.5 97.7 In 1 Year 92.0 95.7 96.5 97.6 95.9 98.6 96.0 In 5 Years 96.9 98.0 93.0 95.7 97.2 97.5 93.8 27
  28. 28. 28 MNI Russia Consumer Report - September 2013 Business Conditions in 1 Year Selected Reasons the number of respondents reporting business will be “better” in a year. All Russia Most businesses cited poor government policy and income and employment as the main reasons for their gloomy outlook for business conditions. 35.9% Longer term, Expectations for Business Conditions in Five Years fell even further by 3.8% to 93.8 in September compared with 97.5 in August. Although this was the lowest reading since May, the indicator averaged 96.1 in the third quarter, up from 95.6 in the second quarter. 64.1% All Russia Better Worse All Russia, Reasons for Better All Russia, Reasons for Worse 41.4% 28.9% 22.1% 28.8% 19.0% 23.4% 15.2% 7.0% 5.8% 5.5% 1.9% 1.1% Worse Better Government/Policy Resource/Environment Government/Policy Resource/Environment Econ. Development Social Stability/ Security Econ. Development Social Stability/ Security Income/Employment Events Income/Employment Events
  29. 29. MNI Russia Consumer Report - September 2013 Business Conditions in 1 Year Regions Business Expectations: Worse or Better? (% of Respondents) 38.4% 41.1% 61.6% 43.4% Central Urals 41.1% 43.5% 58.9% 56.5% North Caucasus West Siberian Worse Better Reasons for Better (% of Respondents) Central Urals Reasons for Worse (% of Respondents) North Caucasus West Siberian Central Urals North Caucasus Government/Policy Resource/Environment Government/Policy Resource/Environment Econ. Development Social Stability/ Security Econ. Development Social Stability/ Security Income/Employment Events Income/Employment Events West Siberian 29
  30. 30. Interest Rates Expectations continued to fall in September. The indicator fell to a new record low of 111.1 from 113.2 in August.
  31. 31. MNI Russia Consumer Report - September 2013 96.3 Durable Buying Conditions Remains Steady The Durable Buying Conditions Indicator, which measures whether respondents think it is a good or bad time to buy a large household good, remained broadly unchanged at 96.3 in September compared with 96.2 in August. The indicator has been reasonably stable in recent months, although is higher than the 92.9 recorded in March, but still below the breakeven 100 level and the three month average of 96.8. Official data has highlighted the current weakness in the economy. GDP growth slowed to 1.2% in the second quarter compared with a year earlier, the weakest since 2009. Concerns about the immediate future for the economy have likely impacted consumers‘ attitude towards buying large household items since the series began in March. Durable Buying Conditions Stable 100 95 90 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Is It a Good or Bad Time to Buy Large Household Goods? (% of Households) Survey participants saying it was an “”excellent time” or “good time” to buy large household durables totalled 16.9% in September, down from 20.4% in August, while the proportion of those saying it was a “bad time” or ”very bad time” fell slightly to 22.3% in September from 23.4% in August. Those responding “no change” totalled 50.1%, up from 48.9% in August. 2.1 10.7 16.9 20.2 50.1 Excellent Time Bad Time Good Time Very Bad Time Neutral Don‘t Know/No Answer Durable Buying Conditions Mar-13 Durable Buying Conditions Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 92.9 98.8 96.1 97.2 97.8 96.2 96.3 31
  32. 32. 32 MNI Russia Consumer Report - September 2013 99.9 Employment Outlook Indicator Highest since May The Employment Indicator, which measures opinion on the outlook for the employment market over the next 12 months, rose 2.6% to 99.9 in September from 97.4 in August, the highest reading since May. The indicator has risen in each of the past two months, although has remained below the breakeven 100 level since June. Survey participants forecasting an improvement in employment totalled 8.8% in September, down from 11.6% in August, while the proportion of those forecasting a worsening totalled 8.9% in September, down from 16.7% in August. The majority of respondents forecast no change in employment, with the percentage of participants increasing from 70.6% in August to 81.4% in September. Employment Outlook Indicator Improves 105 100 95 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Employment Outlook for the Next 12 Months (% of Households) 1.0 8.9 8.8 81.4 Much Better Same Much Worse A Little Better A Little Worse Don‘t Know/No Answer Employment Outlook Mar-13 Employment Outlook Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 100.2 98.5 100.3 99.1 97.1 97.4 99.9
  33. 33. MNI Russia Consumer Report - September 2013 85.6 Prices Sentiment Wide Dissatisfaction Concerns over inflation showed no sign of easing in September as respondents remained concerned about the current level of prices, while expectations for the future fell only slightly. Current Prices Satisfaction Stable 90 The Satisfaction with Current Prices Indicator remained stable at 85.6 in September, although was up by 16.4% from the March reading of 80.4 when the series started. A figure below 100 indicates wider dissatisfaction with current prices, and the further below 100 the greater the dissatisfaction. The indicator has not been above 100 since the series started in March. 85 Consumer price inflation remained sticky at 6.5% on the year in August, though it was down from the 7.1% reported at the start of the year. From July to August, food prices decreased 1.0%, mainly due to a drop in cost of fruits and vegetables. Inflation, though, still remains above the central bank of Russia’s 5.0%6.0% target for inflation for 2013. 70 The Inflation Expectations Indicator measures whether respondents think prices will be higher or lower in 12 months’ time. The Indicator fell 2.8% to 135.4 in September from the peak of 139.4 in August. The percentage of respondents who believed prices would be higher in a years’ time accounted for 65.3% in September, down from 74.9% in August, while those saying prices would be unchanged increased to 33.7% from 24.0%. Respondents who forecast prices would be lower remained the same at 0.8%. 80 75 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Jul-13 Aug-13 Sep-13 Inflation Expectations Indicator 142 140 138 136 134 132 130 128 126 Mar-13 Apr-13 May-13 Jun-13 Asked about how much prices would rise over the Prices Sentiment Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Satisfaction with Current Prices 80.4 76.1 84.2 86.0 73.8 86.0 85.6 Inflation Expectations 130.6 138.3 136.5 133.1 136.1 139.4 135.4 33
  34. 34. 34 MNI Russia Consumer Report - September 2013 Prices Sentiment Regions next year, a high proportion of respondents in September thought that prices could rise up between 11.0% - 24.0% in a year, although this was down compared with last month. Satisfaction with Prices (% of Households) 0.9 Regions Four out of the five top regions showed dissatisfaction with the current level of prices apart from Volga which touched the breakeven 100 mark. Central, North Caucasus and Urals regions showed large falls compared with August. The decline in inflation expectations over the next 12 months between August and September was mainly driven by West Siberian, Urals and North Caucasus regions. The Central region showed stability, while Volga recorded an increase in the Inflation Expectations Indicator. 1.8 3.6 28.8 64.8 Very Satisfied So So Not Satisfied At All Quite Satisfied Not Very Satisfied Don‘t Know/No Answer Inflation Expectations in 12 Months (% of Households) 0.8 0.3 6.4 33.7 58.9 Much Higher Same Much Lower A Little Higher A Little Lower Don‘t Know/No Answer
  35. 35. MNI Russia Consumer Report - September 2013 Inflation Expectations Indicator Expected Change in Prices in 1 Year (% of Households) 170.0 135.4 138.8 All Russia Central 150.3 122.4 Urals Volga North Caucasus Central Urals Volga North Caucasus Much Higher Current Prices Satisfaction Indicator Same Much Lower A Little Higher A Little Lower Don‘t Know/No Answer Satisfaction with Current Prices (% of Households) 100.0 85.6 All Russia 88.7 82.1 80.6 Central Urals Volga North Caucasus All Russia Central Urals Volga North Caucasus Very Satisfied Neutral Not Satisfied At All Quite Satisfied Not Very Satisfied Don‘t Know/No Answer 35
  36. 36. 36 MNI Russia Consumer Report - September 2013 Interest Rate Expectations Indicator Drops to a New Record Low Survey participants expected interest rates to continue to fall over the coming year. The Interest Rate Expectations Indicator fell to 111.1 in September, down from 113.2 in August and the lowest since March when the series started. The fall in the indicator possibly reflected expectations that the central bank could loosen monetary policy - a policy shift towards stimulating growth instead of the current aim of containing inflation. The Central Bank of Russia has kept the one week auction repo rate, its new main policy rate at 5.5% in September. The central bank aims to simplify its monetary policy tools, making it transparent and simpler to understand. Survey participants forecasting that interest rates on home and car loans would be higher in a year accounted for 25.3% in September, down from 30.7% in August. Those forecasting lower rates fell to 6.0% in September, down from 8.4% in August. The percentage of respondents responding that interest rates would remain the same stood at 64.6%, up from 56.1% in August. 111.1 Interest Rate Expectations Indicator Falling since May 125 120 115 110 105 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Expected Change in Interest Rate in 1 year (% of Households) 2.8 6.0 4.1 22.5 64.6 Much Higher Same Much Lower A Little Higher A Little Lower Don‘t Know/No Answer Expected Interest Rate Mar-13 Expected Interest Rate Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 120.1 122.0 123.1 112.1 114.1 113.2 111.1
  37. 37. MNI Russia Consumer Report - September 2013 108.0 Real Estate Investment Indicator Remains Stable The Real Estate Investment Indicator fell slightly to 108.0 in September from 108.5 in August, but remained above the three month average of 107.3. The latest fall followed a significant rise in August which brought the trend decline in the series seen since March to an end. The Real Estate Investment Indicator is composed of three sub-indicators to assess sentiment on the housing market; House Price Expectations, House Buying Sentiment and House Selling Sentiment. House Price Expectations fell to 121.5 in September, down from 128.3 in August, posting a monthly fall of 5.3%. A value above 100 indicates more people expect prices to increase in the next six months. The indicator has been significantly above 100 for the entire period since March. The percentage of respondents who said prices will “go up“ in the next six months was 43.6% in September, while those saying prices would go down totalled just 1.4%. Those who said prices would “stay the same” stood at 52.1% while 2.9% were not sure or did not respond in September. House Buying Sentiment, a measure of whether it is a good time in the next six months to buy a house, increased to 101.7 in September, up by 5.2% from 96.7 in August, the highest reading since March when the series started. Real Estate Investment Indicator 115 110 105 100 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Real Estate Investment Indicator: Contribution to Monthly Change (% pt.) House Selling 0.07 1.55 House Buying Price Expectation -2.09 Real Estate Investment Sentiment Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Real Estate Investment Sentiment 111.6 108.5 107.9 107.9 105.3 108.5 108.0 Price Expectations 135.4 126.6 123.5 122.8 120.7 128.3 121.5 House Buying 97.8 98.1 100.3 100.6 96.6 96.7 101.7 House Selling 98.3 99.1 100.0 99.7 101.4 99.5 99.3 37
  38. 38. 38 MNI Russia Consumer Report - September 2013 Real Estate Investment Indicator Components and Balances House Selling Sentiment is a measure of whether it is a good time in the next six months to sell a house, and has a negative impact on the overall Real Estate Investment Indicator. The Indicator remained stable at 99.3 in September, below the three month average of 100.1. Real Estate Investment Indicator - Components 128.3 121.5 96.7 101.7 99.5 99.3 108.5 108.0 Regions The Real Estate Investment Indicator showed an improvement in Central, North Caucasus and Volga regions. The Indicator for North Caucasus moved above the breakeven 100 mark again after two consecutive declines. The Urals region suffered a decline and West Siberian remained stable. Price Expectation House Buying House Selling Indicator August 2013 September 2013 Real Estate Prices: Expected Changes Expected Changes in Real Estate Prices in the Next 6 months (% of Households) 140 135 130 125 120 115 110 All Russia Mar-13 Apr-13 May-13 Jun-13 Jul-13 Central Urals Aug-13 Sep-13 Volga North Caucasus Go Up Dramatically Stay the Same Go Down Sharply Go Up Slightly Gow Down Slightly Don‘t Know/No Answer
  39. 39. MNI Russia Consumer Report - September 2013 House Buying Sentiment Reasons for Buying Houses (% of Households) 105 8.1 29.0 17.3 100 3.4 95 9.0 33.0 90 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Prices House Selling Sentiment Invetsment Value Supply and Quality Income/Purchasing Power Policy/Interest Rate Others Timing for Selling Houses (% of Households) 105 0.8 7.1 11.5 11.3 100 69.3 95 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Excellent Time Neutral Very Bad Time Good Time Bad Time Don‘t Know/No Answer 39
  40. 40. 40 MNI Russia Consumer Report - September 2013 85.7 Car Purchase Indicator Down from Record High The Car Purchase Indicator fell almost 3.0% in September to 85.7, having risen to a record high in August at 88.3. The indicator assesses whether consumers believe it is a good or bad time to purchase a car and is affected by two components, Car Purchase Expectations and Price of Gasoline Expectations. Car Purchase Indicator Down in September 90 85 The Car Purchase Expectations component, which measures the willingness to buy a car, stood at 107.1 in September, down from 109.3 in August, but still above the three month average of 105.8. 80 The Indicator on Gasoline Prices, which measures the expectations for the price of gasoline in a year, has been rising after bottoming at 128.6 in July. The indicator increased 2.3% to 135.7 in September, from 132.6 reported last month. Increasing gasoline prices have a negative impact on the overall Car Purchase Indicator. Survey participants forecasting gasoline prices would go up totalled 70.9% September, up from 64.1% in August, while the proportion of those saying gasoline prices would go down remained the same at 0.8% in September. Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Car Purchase Indicator - Components 140 130 120 110 100 90 80 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Car Purchase Price of Gasoline Car Purchase Sentiment Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 85.8 86.2 87.2 87.5 86.2 88.3 85.7 Car Purchase 107.4 104.1 105.4 107.5 101.0 109.3 107.1 Price of Gasoline 135.9 131.8 131.0 132.5 128.6 132.6 135.7 Car Purchase Sentiment
  41. 41. MNI Russia Consumer Report - September 2013 Reasons for a Good Time to Buy a Car (% of Households) All Russia Central Urals Reasons for a Bad Time to Buy a Car (% of Households) North Caucasus All Russia Central Urals North Caucasus Prices Policy/Interest Rate Cost of Use/Upkeep Prices Policy/Interest Rate Cost of Use/Upkeep Income/Purchasing Power Supply and Quality Others Income/Purchasing Power Supply and Quality Others Expected Change in the Price of Gasoline (% of Households) Is It a Good Time to Buy a Car? 111.2 109.8 0.8 1.3 107.1 12.0 104.3 16.4 100.0 100.0 69.5 All Russia Go Up Dramatically Stay the Same Go Down Sharply Go Up Slightly Gow Down Slightly Don‘t Know/No Answer Central Urals Volga North Caucasus West Siberian 41
  42. 42. 42 MNI Russia Consumer Report - September 2013 MNI Russia Consumer Indicator Regions Consumer Indicator: North Caucasus Consumer Indicator Components: North Caucasus 110 105.3 97.5 100 90.7 88.9 87.9 96.5 86.9 90 80 70 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Consumer Indicator: West Siberian Current Indicator Expectations Indicator Personal Finance: Current Personal Finance: Expected Business Business Condition: 1 Condition: 5 Year Year Durable Buying Conditions Consumer Indicator Components: West Siberian 115 110 100.0 90.9 90.5 105 80.5 100 80.5 80.5 80.5 95 90 85 80 75 70 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Current Indicator Expectations Indicator Personal Finance: Current Personal Finance: Expected Business Business Condition: 1 Condition: 5 Year Year Durable Buying Conditions
  43. 43. MNI Russia Consumer Report - September 2013 Consumer Indicator: Volga Consumer Indicator Components: Volga 110 119.6 105 99.5 100 90.1 85.2 89.7 89.3 95 80.4 90 85 80 75 70 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Consumer Indicator: Central Current Indicator Expectations Indicator Personal Finance: Current Personal Finance: Expected Business Business Condition: 1 Condition: 5 Year Year Durable Buying Conditions Consumer Indicator Components: Central 107.2 110 105 103.6 102.7 100 103.0 101.9 100.8 100.7 95 90 85 80 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Current Indicator Expectations Indicator Personal Finance: Current Personal Finance: Expected Business Business Condition: 1 Condition: 5 Year Year Durable Buying Conditions 43
  44. 44. 44 MNI Russia Consumer Report - September 2013 Employment Indicator Outlook for the Next 12 Months (% of Households) Central Urals Much Better About the Same A Little Worse North Caucasus Much Worse A Little Better Volga Don‘t Know/No Answer Interest Rates Expectations Indicator (% of Households) Central Urals Much Better About the Same Much Worse A Little Better A Little Worse Don‘t Know/No Answer Volga North Caucasus
  45. 45. MNI Russia Consumer Report - September 2013 MNI Russia Consumer Indicator Income Groups < RUB 480,000 Per Annum 99.1 97.8 < RUB 480,000 - Components 99.6 99.7 100.9 100.9 98.5 98.0 97.3 90.1 95.0 < RUB 480,000 Consumer Indicator < RUB 480,000 Current Indicator < RUB 480,000 Expectations Indicator Finance: Current Personal Finance: Expected Business Condition: 1 Year Business Condition: 5 Year Durable Buying Conditions 96.6 94.0 Business Condition: 5 Year Durable Buying Conditions August 2013 September 2013 > RUB 480,000 Per Annum 109.3 102.0 101.4 > RUB 480,000 - Components 100.9 99.0 91.0 90.3 96.2 92.1 Over RUB 480,000 Consumer Indicator August 2013 September 2013 Over RUB 480,000 Current Indicator Over RUB 480,000 Expectations Indicator Personal Finance: Current Personal Finance: Expected Business Condition: 1 Year 45
  46. 46. 46 MNI China Consumer Report - July 2013 Data Tables A closer look at the data behind the MNI Russia Consumer Sentiment.
  47. 47. MNI Russia Consumer Report - September 2013 Russia - Central Overview Jul-13 Aug-13 Sep-13 Highest Since Lowest Since 3-Month Average Monthly Change Monthly % Change MNI Russia Consumer Indicator 103.4 104.5 102.9 - Jun-13 103.6 -1.6 -1.55% Current Indicator 102.8 104.9 101.9 - Jun-13 103.2 -3.0 -2.94% Expectations Indicator 103.8 104.2 103.6 - Jun-13 103.9 -0.6 -0.62% Personal Finance: Current 103.9 106.4 100.7 - May-13 103.7 -5.7 -5.37% Personal Finance: Expected 109.2 107.4 107.2 - May-13 107.9 -0.2 -0.16% Business Condition: 1 Year 102.7 105.9 100.8 - Jun-13 103.2 -5.1 -4.78% Business Condition: 5 Year 99.5 99.4 102.7 series high - 100.5 3.3 3.32% Durable Buying Conditions 101.7 103.5 103.0 - Jul-13 102.7 -0.5 -0.44% 99.0 96.0 97.4 Jul-13 - 97.4 1.4 1.46% 110.8 109.5 112.3 May-13 - 110.9 2.8 2.59% 86.2 87.5 89.4 series high - 87.7 1.9 2.20% Employment Outlook Indicator 101.1 103.9 99.5 - Jun-13 101.5 -4.4 -4.24% Inflation Expectations Indicator 135.7 139.3 138.8 - Jul-13 137.9 -0.5 -0.36% Current Prices Satisfaction Indicator 73.7 82.9 80.6 - Jul-13 79.1 -2.3 -2.70% Interest Rates Expectations Indicator 104.9 107.5 109.2 May-13 - 107.2 1.7 1.58% Current Business Conditions Indicator Real Estate Investment Indicator Car Purchase Indicator 47
  48. 48. 48 MNI Russia Consumer Report - September 2013 Russia - Urals Overview Jul-13 Aug-13 Sep-13 Highest Since Lowest Since 3-Month Average Monthly Change Monthly % Change MNI Russia Consumer Indicator 101.2 99.8 99.1 - May-13 100.0 -0.7 -0.7% Current Indicator 110.9 100.9 103.2 Jul-13 - 105.0 2.3 2.3% 94.7 99.1 96.4 - Jul-13 96.7 -2.7 -2.7% 109.2 108.9 110.0 series high - 109.4 1.1 1.0% Personal Finance: Expected 97.2 104.7 97.0 - series low 99.6 -7.7 -7.4% Business Condition: 1 Year 89.8 96.0 110.5 series high - 98.8 14.5 15.1% Business Condition: 5 Year 97.2 96.6 81.7 - series low 91.8 -14.9 -15.4% Durable Buying Conditions 112.5 92.9 96.3 Jul-13 - 100.6 3.4 3.7% Current Business Conditions Indicator 105.4 87.9 96.6 Jul-13 - 96.6 8.7 9.9% Real Estate Investment Indicator 108.3 120.9 115.5 - Jul-13 114.9 -5.4 -4.5% Car Purchase Indicator 97.3 89.6 90.9 Jul-13 - 92.6 1.3 1.5% Employment Outlook Indicator 86.1 91.0 100.0 May-13 - 92.4 9.0 9.9% Inflation Expectations Indicator 149.9 158.7 150.3 - Jul-13 153.0 -8.4 -5.3% Current Prices Satisfaction Indicator 93.5 94.0 88.7 - May-13 92.1 -5.3 -5.6% Interest Rates Expectations Indicator 133.0 138.6 115.8 - series low 129.1 -22.8 -16.5% Expectations Indicator Personal Finance: Current
  49. 49. MNI Russia Consumer Report - September 2013 Russia - Volga Overview Jul-13 Aug-13 Sep-13 Highest Since Lowest Since 3-Month Average Monthly Change Monthly % Change 96.9 95.8 93.8 - May-13 95.5 -2.0 -2.1% 107.7 89.3 85.2 - Mar-13 94.1 -4.1 -4.6% 89.7 100.2 99.5 - Jul-13 96.5 -0.7 -0.7% Personal Finance: Current 115.4 88.9 90.1 Jul-13 - 98.1 1.2 1.3% Personal Finance: Expected 100.0 100.0 119.6 series high 106.5 19.6 19.6% Business Condition: 1 Year 84.6 100.0 89.7 - Jul-13 91.4 -10.3 -10.3% Business Condition: 5 Year 84.6 100.7 89.3 - Jul-13 91.5 -11.4 -11.3% Durable Buying Conditions 100.0 89.6 80.4 - May-13 90.0 -9.2 -10.3% 65.4 100.0 100.0 series high - 88.5 0.0 0.0% 105.1 126.4 129.8 series high - 120.4 3.4 2.7% Car Purchase Indicator 94.0 94.8 75.0 - series low 87.9 -19.8 -20.9% Employment Outlook Indicator 87.9 69.5 100.0 May-13 - 85.8 30.5 43.9% Inflation Expectations Indicator 165.4 150.0 170.0 May-13 - 161.8 20.0 13.3% Current Prices Satisfaction Indicator 69.2 89.6 100.0 series high - 86.3 10.4 11.6% Interest Rates Expectations Indicator 137.9 109.8 100.0 - series low 115.9 -9.8 -8.9% MNI Russia Consumer Indicator Current Indicator Expectations Indicator Current Business Conditions Indicator Real Estate Investment Indicator 49
  50. 50. 50 MNI Russia Consumer Report - September 2013 Russia - North Caucasus Overview Jul-13 Aug-13 Sep-13 Highest Since Lowest Since 3-Month Average Monthly Change Monthly % Change MNI Russia Consumer Indicator 94.9 100.0 93.7 - Apr-13 96.2 -6.3 -6.3% Current Indicator 85.8 97.5 87.9 - Jul-13 90.4 -9.6 -9.8% 101.0 101.7 97.5 - series low 100.1 -4.2 -4.1% 90.7 108.0 88.9 - Jun-13 95.9 -19.1 -17.7% Personal Finance: Expected 102.0 105.6 105.3 - Jul-13 104.3 -0.3 -0.3% Business Condition: 1 Year 100.7 99.9 90.7 - series low 97.1 -9.2 -9.2% Business Condition: 5 Year 100.3 99.5 96.5 - series low 98.8 -3.0 -3.0% Durable Buying Conditions 81.0 87.1 86.9 - Jul-13 85.0 -0.2 -0.2% 102.1 100.0 102.4 Apr-13 - 101.5 2.4 2.4% Real Estate Investment Indicator 95.4 93.5 103.5 Apr-13 97.5 10.0 10.7% Car Purchase Indicator 79.4 83.4 87.2 Jun-13 - 83.3 3.8 4.6% Employment Outlook Indicator 101.6 100.7 100.0 - series low 100.8 -0.7 -0.7% Inflation Expectations Indicator 124.3 126.0 122.4 - Mar-13 124.2 -3.6 -2.9% Current Prices Satisfaction Indicator 74.8 84.5 82.1 - Jul-13 80.5 -2.4 -2.8% Interest Rates Expectations Indicator 107.2 102.1 95.5 - series low 101.6 -6.6 -6.5% Expectations Indicator Personal Finance: Current Current Business Conditions Indicator
  51. 51. MNI Russia Consumer Report - September 2013 Russia - West Siberian Overview Jul-13 Aug-13 Sep-13 Highest Since Lowest Since 3-Month Average Monthly Change Monthly % Change MNI Russia Consumer Indicator 96.7 77.2 86.5 Jul-13 - 86.8 9.3 12.0% Current Indicator 96.2 58.1 80.5 Jul-13 - 78.3 22.4 38.6% Expectations Indicator 97.1 90.0 90.5 Jul-13 - 92.5 0.5 0.6% Personal Finance: Current 117.0 68.1 80.5 Jul-13 - 88.5 12.4 18.2% Personal Finance: Expected 100.0 100.0 100.0 series high - 100.0 0.0 0.0% Business Condition: 1 Year 91.2 70.0 90.9 Jul-13 - 84.0 20.9 29.9% Business Condition: 5 Year 100.0 100.0 80.5 - series low 93.5 -19.5 -19.5% Durable Buying Conditions 75.3 48.1 80.5 Apr-13 - 68.0 32.4 67.4% Current Business Conditions Indicator 100.0 100.0 100.0 series high 100.0 0.0 0.0% Real Estate Investment Indicator 125.1 119.7 119.9 Jul-13 - 121.6 0.2 0.2% 79.1 85.0 75.0 - series low 79.7 -10.0 -11.8% Employment Outlook Indicator 100.0 91.0 100.0 series high - 97.0 9.0 9.9% Inflation Expectations Indicator 100.0 120.9 100.0 - series low 107.0 -20.9 -17.3% Current Prices Satisfaction Indicator 41.2 80.0 80.5 Jun-13 - 67.2 0.5 0.6% Interest Rates Expectations Indicator 100.0 100.0 110.4 Apr-13 - 103.5 10.4 10.4% Car Purchase Indicator 51
  52. 52. 52 MNI Russia Consumer Report - September 2013 All Russia Overview by Age Jul-13 Aug-13 Sep-13 Highest Since Lowest Since 3-Month Average Monthly Change Monthly % Change 100.9 104.0 97.3 - series low 100.7 -6.7 -6.4% 99.1 101.9 94.3 - series low 98.4 -7.6 -7.5% Expectations Indicator 102.0 105.3 99.4 - May-13 102.2 -5.9 -5.6% Personal Finance: Current 102.3 104.3 93.3 - series low 100.0 -11.0 -10.5% Personal Finance: Expected 105.6 107.6 105.9 Apr-13 - 106.4 -1.7 -1.6% Business Condition: 1 Year 100.6 107.4 97.1 - May-13 101.7 -10.3 -9.6% Business Condition: 5 Year 99.9 101.0 95.2 - May-13 98.7 -5.8 -5.7% Durable Buying Conditions 96.0 99.5 95.2 - series low 96.9 -4.3 -4.3% 99.0 94.7 97.5 Jul-13 - 97.1 2.8 3.0% 101.6 94.1 101.2 Jul-13 - 99.0 7.1 7.5% 97.2 95.2 95.1 - series low 95.8 -0.1 -0.1% Personal Finance: Current 103.7 96.5 102.0 Jul-13 - 100.7 5.5 5.7% Personal Finance: Expected 102.9 103.6 102.4 - series low 103.0 -1.2 -1.2% Business Condition: 1 Year 92.6 87.8 96.4 series high - 92.3 8.6 9.8% Business Condition: 5 Year 96.1 94.1 86.5 - series low 92.2 -7.6 -8.1% Durable Buying Conditions 99.4 91.6 100.5 May-13 - 97.2 8.9 9.7% 96.5 98.8 96.7 Jul-13 - 97.3 -2.1 -2.1% 102.3 104.1 87.9 May-13 - 98.1 -16.2 -15.6% 92.6 95.2 102.6 series high - 96.8 7.4 7.8% 105.1 111.3 85.7 - series low 100.7 -25.6 -23.0% Personal Finance: Expected 97.8 96.4 110.3 series high - 101.5 13.9 14.4% Business Condition: 1 Year 89.0 95.9 91.3 Jul-13 - 92.1 -4.6 -4.8% Business Condition: 5 Year 91.1 93.4 106.2 series high - 96.9 12.8 13.7% Durable Buying Conditions 99.5 96.9 90.2 May-13 - 95.5 -6.7 -6.9% Age 18-34 MNI Russia Consumer Indicator Current Indicator Age 35-54 MNI Russia Consumer Indicator Current Indicator Expectations Indicator Age 55-64 MNI Russia Consumer Indicator Current Indicator Expectations Indicator Personal Finance: Current
  53. 53. MNI Russia Consumer Report - September 2013 All Russia - Overview by Income Jul-13 Aug-13 Sep-13 Highest Since Lowest Since 3-Month Average Monthly Change Monthly % Change MNI Russia Consumer Indicator 97.7 97.8 98.0 series high - 97.8 0.2 0.2% Current Indicator 99.3 95.0 99.1 Jul-13 - 97.8 4.1 4.3% Expectations Indicator 96.6 99.6 97.3 - Jul-13 97.8 -2.3 -2.3% Personal Finance: Current 100.7 100.2 99.7 - Jun-13 100.2 -0.5 -0.5% Personal Finance: Expected 101.3 103.3 100.9 - Jun-13 101.8 -2.4 -2.3% Business Condition: 1 Year 93.4 97.5 100.9 Jun-13 - 97.3 3.4 3.5% Business Condition: 5 Year 95.1 98.0 90.1 - May-13 94.4 -7.9 -8.1% Durable Buying Conditions 97.9 89.8 98.5 series high - 95.4 8.7 9.7% MNI Russia Consumer Indicator 100.9 101.4 96.2 - series low 99.5 -5.2 -5.1% Current Indicator 101.0 102.0 92.1 - series low 98.4 -9.9 -9.7% Expectations Indicator 100.8 100.9 99.0 - Jun-13 100.2 -1.9 -1.9% Personal Finance: Current 105.2 103.6 90.3 - series low 99.7 -13.3 -12.8% Personal Finance: Expected 105.4 105.9 109.3 Mar-13 - 106.9 3.4 3.2% Business Condition: 1 Year 97.2 99.6 91.0 - Mar-13 95.9 -8.6 -8.6% Business Condition: 5 Year 100.0 97.4 96.6 - Jun-13 98.0 -0.8 -0.8% Durable Buying Conditions 96.9 100.5 94.0 - series low 97.1 -6.5 -6.5% < RUB 480,000 Per Annum > RUB 480,000 Per Annum 53
  54. 54. 54 MNI Russia Consumer Report - September 2013 Methodology The MNI Russia Consumer Sentiment Survey is a wide ranging monthly survey of consumer confidence across Russia. Data is collected through computer aided telephone interviews (CATI), with each interviewee selected randomly by computer. At least 1,000 interviews are conducted each month. The survey adopts a similar methodology to the University of Michigan survey of U.S. consumer sentiment. The MNI Russia Consumer Indicator is derived from five questions, two on current conditions and three on future expectations: 1) Current personal financial situation compared to a year ago 2) Current willingness to buy major household items 3) Personal financial situation one year from now 4) Overall business conditions one year from now 5) Overall business conditions for the next 5 years Indicators relating to specific questions in the report are diffusion indices with 100 representing a neutral level, meaning positive and negative answers are equal. Values above 100 indicate increasing positivity while values below show increasing negativity.
  55. 55. Discovering trends in BRIC countries: MNI BRIC indicators MNI‘s new BRIC indicators explore attitudes, perspectives and confidence in Brazil, Russia, India and China. Our data and monthly reports present an advance picture of the economic landscape as perceived by businesses and consumers. Our indicators allow investors, economists, analysts, and companies to identify economic trends and make informed investment and business decisions. Our data moves markets. www.mni-indicators.com Insight and data for better decisions
  56. 56. Published by MNI Indicators | Deutsche Börse Group Westferry House 11 Westferry Circus London E14 4HE www.mni-indicators.com info@mni-indicators.com @MNIIndicators Copyright© 2013 MNI Indicators | Deutsche Börse Group. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved.

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