Translated material
A burst of optimism
For the first time, Russians believed in a bright consumer future
For the first time in all the calculations, which have been going on for ten years, the consumer confidence index of Russians turned positive and amounted to +0.4%. Such data was published yesterday by Rosstat. In theory, this means that the industry can increase production - consumers are willing to pay for additional goods. But in Russian practice, it is necessary to make allowances for inflation, which distorts the picture, forcing people to spend instead of saving. Experts warn the population against overly rosy sentiments.The newspaper Vremya Novostei has already written about the unexpected hyper-responsibility of Russians , the majority of whom, according to a VTsIOM survey, are ready to sacrifice the growth of their personal income in order to curb inflation. And here is a new confirmation of the “consciousness” of the population, from the point of view of the authorities - despite the not very successful start to the year with high inflation, our people’s confidence in a bright future is only growing.
The consumer confidence index is an aggregate indicator that is calculated on the basis of five private indices: past and expected changes in personal financial situation, past and expected changes in the economic situation in the country, as well as the favorable conditions for large purchases. At the end of last year, all together they showed -5%. And now there is a sharp jump to +0.4%.
It happened to a greater extent due to faith in national prospects, rather than hope for one’s own well-being. Only two indices showed positive values - assessments of past and expected changes in the country's economy, +6% (+2% at the end of last year) and +8% (+2%), respectively. Although estimates of personal well-being are not so optimistic. The index of changes in personal financial situation was
-0.1%, index of expected changes and even worse, -1%. However, they have increased significantly compared to the fourth quarter of last year, when their values were recorded at -6% and -7%, respectively. The worst situation is with the assessment of the favorable conditions for large purchases; this index stopped at -12%, falling by 5% compared to 2007.
Another indicator is usually calculated in positive figures, but this does not make its meaning positive - the share of those expecting a significant rise in prices in the near future was 62%. A year ago the number of pessimists was lower, 49%, but in the fourth quarter of 2007 their number increased to 66%.
Experts contacted by the Vremya Novostey newspaper believe that, taken together, these data indicate the presence of problems in the economy. “This index is a signal to industry that there is effective demand, that is, production can be developed,” explains Elena Matrosova, director of the Center for Macroeconomic Research at BDO Unicon. “But in our case, we need to additionally take inflation into account. Most likely, people simply do not see the opportunity to save and decide to continue consumption,” adds Ms. Matrosova. But savings are one of the sources of investment and further development of production.
“High inflation is the engine of consumption,” says Alfa Bank chief economist Natalia Orlova. “In addition, there is still the impression that the growth of wages and incomes will continue. But this long-term model is unsustainable. The country does not have a sufficiently diversified income base to sustain high levels of consumption in the future. An increase in the consumer confidence index, on the one hand, is a good signal for companies that their market share will not decline in the near future. But combined with high inflation, this is an obvious call for the government about the need for structural changes in the economy,” says Ms. Orlova.
As for the significant difference in citizens’ assessments of the chances for growth in personal well-being and the prospects for the Russian economy as a whole, here, according to experts, general economic and social indicators play a role. “Gold and foreign exchange reserves, oil prices, the budget deficit, the political situation - these are the indicators that previously told us that a crisis was about to begin,” recalls Elena Matrosova. Now all these indicators suggest a bright future. Besides inflation. “We can already expect that by the end of the year it will be at least 14%,” says Elena Matrosova.