30/5/15: Russian Demand Down Sharply in April

As BOFIT reports this week: Russian domestic demand shrunk at an accelerating rate in April with retail sales down 10% y/y after contracting 7.5% in 1Q 2015. Investment was down 5% in April, following 4% drop in 1Q 2015. Investment fall would have been even sharper if not for a massive +30% rise in volume of new housing completions (most likely a temporary rush to complete stock of unfinished housing int espouse to higher cost of carry).

Real wages declined also continued to fall in 1Q 2015, down 8% y/y, posting second consecutive quarterly decline. In April, real wages shrunk 13%. Pensions dropped 4% y/y in 1Q 2015.

Latest estimates from the Economy Ministry put Russian GDP at -4% in April, deeper than 1.9% contraction recorded in 1Q 2015.