Russia: slowdown in consumer spending is here to stay

One of the most striking aspects of the recent slowdown in the Russian economy is that the previously resilient consumer sector has weakened sharply. And while this may in part be a result of spillovers from the Ukraine crisis, we think there are more fundamental reasons behind the weakening of consumer spending. Accordingly, it is likely to remain extremely weak over the coming years, providing a much smaller prop to growth than it did over the past decade.