Russia's internal consumption has been picking up after the shock to real income in Q1 15. The internal consumption is driven by slowly improving consumer sentiment and decelerating consumer price inflation.
However, June saw a mixed environment for retail sales: On the one hand, headline CPI inflation drifted down to 0.4% mom, but on the other hand, the ruble lost a huge portion the gains it had made since late March.
Societe Generale states, "Retails sales growth is expected to be at -8.9% yoy(consensus estimates -8.8% yoy), amid these challenging dynamics (mostly for non-food goods). However, with both the CBR and Rosstat seeing a better outlook for consumer confidence and early signs of a switch from a saving to a consuming regime, we do not exclude the possibility of positive surprises in the coming months."
