Personal real disposable income increases 11% y-o-y in 3Q10

Real disposable income was up 11% y-o-y in 3Q10, decelerating from +11.8% in 2Q10, according to data released yesterday by the State Statistics Committee. Mykyta Mykhaylychenko: More alarming than the income increase is that household “deleveraging” is continuing: savings’ share in total income went up to 11.1% in 3Q10 (4Q rolling), from 10.5% in 2Q10 and vs. below 8% before the crisis. This explains why growth in household consumption (+7.5% y-o-y in 3Q10) is lagging that of real disposable income. We expect deleveraging to reverse in 2011, which will provide additional momentum to the domestic consumer demand recovery.