Russia

High inflationary pressures previously crimped household demand, with disposable wage growth (adjusted for inflation) only recently pushing back into positive growth territory on a year-on-year basis. Consumer price inflation has since started to slow, dropping to 7.2% y-o-y in September, having averaged 9.1% between January and September. Another sharp spike in imported inflation on account of the sharp selloff in the rouble would derail the recent improvement in retail sales and real income growth, though central bank intervention should preclude a sharp drop.

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