They started buying less and saving more
The growth rate of consumer activity of our fellow citizens is decelerating — from almost 10% in February to 5.6% in June. Such data are provided by the Ministry of Economic Development and Trade and the Center for Macroeconomic Analysis and Short-Term Forecasting (CMASF). Against the backdrop of rising incomes, experts consider such a decrease to be «too noticeable». After all, in theory, everything should be exactly the opposite.
Since the beginning of this year, all three pillars of consumption have been considered: retail trade volumes, provision of paid services to the population, and turnover in the catering system. In all three areas, a slowdown in the growth rate of consumer activity has been recorded. If in February the total turnover grew by 9.8%, then it fell gradually month after month. In March it was 8.5%, in April — 7.3%, in May — 6.6%, and in June — 5.6%.
It can be assumed that Russians began to save on purchases in advance in order to make important strategic reserves «just in case» closer to winter, when the new crop of vegetables and cereals becomes seasonally cheaper. However, the dynamics of consumer activity has been declining not only since the beginning of 2024, but for three quarters in a row. According to statistics, it has almost halved: from 12.6% in the third quarter of last year to 6.5% in the second quarter of 2024. Research by the Center for Macroeconomic Analysis and Short-Term Forecasting (CMASF) shows approximately the same picture.
It should be noted that the Central Bank considers the high consumer activity of Russians to be a pro-inflationary factor and is tightening monetary policy. The key rate of the Central Bank remained at 16% per annum for eight months, and was raised to 18% at the end of July. And although the rate of consumption growth is decreasing, inflation continues to accelerate during this same period for some reason. According to the Ministry of Economic Development, in annual terms it amounted to 9.1% as of July 29.
Summary: consumption is falling, inflation is not decreasing, measures from the Central Bank are tightening. Does this situation lead to a stable trend of decreasing appetites of Russians? According to experts, it is too early to talk about the emerging trend of cooling consumption.
According to Rosstat, retail turnover in nominal terms in the first quarter of 2024 amounted to 12.5 trillion rubles, and in the second quarter 13.3 trillion. There is clear growth. And compared to the same period in 2023 (11.5 trillion rubles), it has grown by about 16%. True, the increased profits of retail organizations are also explained by the fact that prices in stores are creeping up. What is growing faster: wages or prices?
In the second quarter of this year, real disposable incomes of the population increased by 9.6% year-on-year, which is even slightly higher than the annual inflation of 9.1% at the end of July. But this is in general. For example, since the beginning of summer alone, potatoes, our «second bread», have risen in price by 36.6%. Many other vegetables have also increased in price significantly.
We asked financial analyst and candidate of economic sciences Mikhail Belyaev about why consumption is slowing down as Russians' incomes grow.
— Income is divided into two parts, — he explains. — One can be spent on purchases, and the other is better saved. The high key rate of the Central Bank automatically increases the rates on deposits in commercial banks. And if a person on the wave of rising salaries already has everything or almost everything for a normal existence, he does not run to the store to spend the rest of the money. He looks — what is more profitable. Let's say, buy a washing machine now, since it's time to replace the old one. Or put the money in a deposit at 20% per annum and in a year buy a new washing machine — but already on interest. That is, almost for nothing.
And if the scales tip toward savings, then the person does not hesitate. 20% «for free» is a very good rate, another such offer may not turn up. Actually, this explains the decrease in the rate of purchasing activity. Statistics show that bank deposits are growing very quickly, savings are going to credit institutions. This cuts off some of the money for consumption.
— Everything that is happening in the country's economy today has an unstable, situational and opportunistic nature. Everything, except for the strict monetary policy of the Central Bank. But the regulator, which is trying to limit demand with its actions, forgets that it is also divided into two parts. Consumer and corporate. By restraining consumer demand, the Central Bank is also slowing down corporate demand, which affects the development of the entire economy.