Household income growth slows in 2013

Household income increased 5.3% yoy in 2013, according to state statistics released on March 31. The growth pace was half the prior year rates (+11.1% yoy in 2012). Profits (+7.9% yoy) and social payments (+6.0% yoy) grew the fastest, while wage growth slowed down considerably to 4.0% yoy vs. 12.1% yoy in 2012.

Alexander Paraschiy: It’s no surprise to see sliding income growth in light of the devastated economy. In 2014, the tendency will only be aggravated and household incomes will likely fall amidst the 30% currency devaluation and approved budget spending cuts. As a result, we estimate private consumption to sink 5.8% yoy by the end of 2014.