OREANDA-NEWS. January 29, 2010. Rosstat released statistics both for December and FY09 that included some upside surprises as most of the figures outpaced consensus expectations, reported the press-centre of OTKRITIE Financial Corporation.

View: Most of the visible improvement in December was more a function of the weak comparative base than a confirmation of renewed growth. However, we note that a substantial improvement in disposable income (+7.6% YoY) in December raised the full-year figure to 1.9% growth YoY.

This underscores the level of deterioration in consumer confidence that resulted in a 5.5% FY09 drop of retail trade, which is a proxy for consumption. As incomes become more stable we expect a recovery in consumption, with support coming from the increase in pensions effective in January. Our major concern, however, is the rise in imports, which highlights the risk that domestic producers will enjoy little benefit from consumption recovery.

Beginning in September 2009, growth in imports returned to pre-crisis levels, and in 4Q09 amounted to 24% QoQ. Meanwhile, industrial output has stagnated, showing no growth when the weakness of the base effect is taken into account. Likewise, soft figures for cargo turnover, which are a leading indicator, add to our concern.