Russian consumer turmoil continues

The dip in Russia's fixed investments and industrial production was less (-5.6% y/y and -3.7% y/y, respectively) than expected while the demand side continues to disappoint on the back of the purchase power crash.

As inflation remained high, real wages growth (-9.7% y/y) shrank the most in 16 years, pushing retail sales to their lowest level since 1998 (-10.4% y/y). 

"The real wages are expected to shrink further in 2016 as the future budget will see imminent cuts on the expenditure side. The unemployment rate fell to 5.2% in September from 5.3% a month earlier, continuing to support demand", says Danske Bank.

Russian consumers have suffered the most during the current recession. Purchase power fell to its weakest in years as 2015 average inflation is at 15.5% y/y, pushed up by the devalued rouble and limited supply due to Russia's counter measures.