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Output & Demand - August


Rosstat has published its August statistics pack on economic conditions.

Unemployment decreased to 5.2%, from 5.3% in July. More importantly, the seasonally adjusted unemployment rate stayed at 5.5%.

Real retail sales growth slowed 0.4pp to 4.0% YoY, owing to a tangible deceleration in non-food sales (not surprisingly, given the double-digit annual decline in car sales (AEB) and a YoY contraction in non-volatile imports from non-CIS (customs)), despite the faster growth in food sales (which looks logical, given the more pronounced deflation in fruit and vegetables).

Investment renewed a post-crisis low, declining 3.9% YoY (after the 2.5% YoY increase in the previous month). This surprised us and consensus to the downside.

Construction declined 3.1% YoY after the rather strong 6.1% YoY growth a month ago.

Real wage growth edged down to 5.9% YoY, from the downwardly revised figure in July (to 6.4% YoY).

In separate news, MinEconomy estimates that GDP growth slowed to 1.6% YoY in August, from 1.8% YoY in July.

The August pack of economic data showed a sharp and unexpected drop in investments and slower non-food retail sales. While one could interpret the stable SA unemployment as an encouraging sign, we believe it is just a temporary normalisation after the sharp upturn in June. September will likely bring a technical turning point for investment activity and, at the same time, further evidence of a cooling labour market. Admittedly, the weak recent data is unlikely to be key for the next CBR decision, as all eyes are still on headline inflation (once it slides below 6.0% YoY, the chances of an easing step will greatly increase).
Daria Isakova
VTB Capital analyst

unemployment, GDP, CBR

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