MNI Russia Consumer Report December Insight and data for better decisions

Transcription

1 MNI Russia Consumer Report December 2014 Insight and data for better decisions

2 2 MNI Russia Consumer Report - December 2014 About MNI Indicators Insight and data for better decisions MNI Indicators offers unique macro-economic data and insight to businesses and the investment community. We produce data and intelligence that is unbiased, pertinent and responsive. Our data moves markets. Specialising in business and consumer focused macro-economic reports, we give our customers the ability to make timely and relevant decisions. We strive to provide up-to-date information on business and consumer confidence on the economy. MNI Indicators publishes data on a monthly basis. Our indicators are based on a unique and proprietary methodology and are designed to present an advance picture of the economic landscape as perceived by businesses and consumers every month. Our monthly reports explore attitudes, perspectives and confidence across different countries and regions. They deliver in-depth analysis, highlight changing patterns and how these can affect potential developments in business and consumer activities. Written and researched by Philip Uglow, Chief Economist Shaily Mittal, Economist George Brown, Junior Economist Release Time Embargoed until 9:45 a.m. Moscow time January 12, 2015 MNI Indicators Deutsche Börse Group Westferry House 11 Westferry Circus London E14 4HE Tel: +44 (0) info@mni-indicators.com MNI Indicators is part of MNI, a leading provider of news and intelligence. MNI is a wholly owned subsidiary of Deutsche Börse Group, one of the largest worldwide exchange organisations. Copyright 2015 MNI Indicators Deutsche Börse Group. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved.

3 MNI Russia Consumer Report - December MNI Russia Consumer Report - December 2014 Contents 4 Editorial 6 Executive Summary 12 Economic Landscape 16 Indicators 17 MNI Russia Consumer Indicator 24 Personal Finances 26 Business Conditions 29 Durable Buying Conditions 30 Employment Outlook 31 Prices Sentiment 34 Interest Rates Expectations 35 Real Estate Investment 38 Car Purchase 40 Consumer Indicator - Regions 43 Consumer Indicator - Income Groups 44 What the Panel Said 46 Data Tables 54 Methodology

4 4 Spitzzeile Titel Rouble on the Ropes The rouble has been left black and blue from the punches thrown at it over the past year, with recent events turning into a full-blown currency crisis. Nevertheless, the Central Bank of Russia hasn t thrown in the towel, at least for now.

5 MNI Russia Consumer Report - December The rouble has been left black and blue from the punches thrown at it over the past year, with recent events turning into a full-blown currency crisis. Nevertheless, the Central Bank of Russia hasn t thrown in the towel, at least for now. Russia has faced many Western opponents over the past year following its annexation of Crimea, culminating in the imposition of economic sanctions against some of its largest companies and most prominent individuals. While these have no doubt hurt, it is the slide in the price of oil to less than $50 a barrel that has really hurt. The one-two punch of Western economic sanctions and the collapse of oil prices have caused the rouble to weaken significantly over the past year. In response, the Central Bank of Russia (CBR) raised the key rate in five of its monthly monetary policy meetings by a total of 500 basis points and abandoned a managed floating exchange rate under which it spent more than $30 billion in October alone trying in vain to stop the slide in the rouble. temporary relaxing of banking standards requiring banks to recognise losses on their securities portfolios and an increase in opportunities to buy foreign exchange funds through auctions held by the CBR. Following the announcement of the measures, the rouble improved significantly to register the largest daily appreciation since the 1998 crisis. While the CBR has a range of tools it can use to try and stem the decline in the rouble, a further fall in the price of oil could well leave it powerless with speculators seizing their chance to land a knockout punch. George Brown Junior Economist MNI Indicators Even so, such actions failed to stem the weakening in the rouble and so at 1:00am Moscow time on December 16, the CBR announced a huge 650 basis points hike in the key rate to 17% just days after an official meeting when it raised it by 100 basis points to 10.5%. Rather than help support the rouble, however, the drastic action fuelled fears causing the rouble to weaken from 58.2 to 80.1 to the US dollar, the greatest daily drop since the 1998 crisis in what is now being called Black Tuesday. While the rouble recovered to 67.9 to the US dollar by the end of trading, the size of the hike had shown how serious the situation is in Russia and just how slow the CBR has been to react to the significant weakening in the currency. Faced with a currency crisis, the CBR announced that it would implement seven measures to attempt to maintain stability. These included a pledge to recapitalise Russian credit institutions in 2015, a

6 6 MNI China Consumer Report - July 2013 Executive Summary The MNI Russia Consumer Indicator rose by 4.2% on the month to 79.8 in December from a series low of 76.6 in November.

7 MNI Russia Consumer Report - December The MNI Russia Consumer Indicator rose by 4.2% on the month to 79.8 in December from a series low of 76.6 in November. Consumer sentiment has fallen sharply since the onset of the Ukraine crisis with confidence now standing 16.6% below the level seen a year earlier. The December survey ended before the central bank s decision to hike rates sharply in December in response to the plunge in the currency. Three out of the five components which make up the Consumer Indicator improved in December, with the fall in sentiment led by households willingness to purchase large household items. With growing concerns about the stability of the economy, rising inflation and the plunge in the rouble there was evidence of consumers purchasing large household items rather than see the value of their savings erode. Expectations for interest rates rose to in December, the highest in the survey s history, just prior to a dramatic rate hike by the central bank to stem the depreciation in the rouble. Expectations for the price of gasline in the next 12 months rose to a new series high of as the extension of excise taxes on Russian gasoline production in 2015 looks likely to transpire into higher fuel costs for consumers over the months ahead. The Current Indicator, which measures consumers assessment of current conditions, rose to 80.6 in December from a series low of 72.5 in November, while the Expectations Indicator, which is made up of the three forward-looking components, remained unchanged at 79.2 this month. Moreover, a greater proportion of respondents considered it to be a good time to invest in real estate with consumers preferring bricks and mortar to the bank. Expectations for house prices reached in December, the highest level in the survey s history. The standoff between Russia and the West continued to weigh down on our panel s perception of the current business environment, with sentiment falling to a series low of 83.2 in December. There was, however, some improvement in the short-term outlook for business conditions to 69.6, although it remained very weak. MNI Russia Consumer Indicator - Components 100 Inflation expectations hit a record high of as consumers saw little end to ever spiralling prices with official data showed that consumer price inflation accelerated to a five-year high in December. Household finances remained firmly in contraction as the high rate of inflation and poor job market continued to place considerable pressure on Russian consumers, ticking up only slightly to 70.8 in December. 0 Personal Finance: Current Personal Finances: Expectations Durable Buying Conditions Business Conditions in 1 Year Business Conditions in 5 Years

8 8 MNI Russia Consumer Report - December 2014 All Russia - Overview Oct-14 Nov-14 Dec-14 Highest Since Lowest Since 3-Month Average Monthly Change Monthly % Change MNI Russia Consumer Indicator Oct % Current Indicator Oct % Expectations Indicator Oct % Personal Finance: Current Oct % Personal Finance: Expected Oct % Business Condition: 1 Year Oct % Business Condition: 5 Years Oct % Durable Buying Conditions Sep % Current Business Conditions Indicator series low % Real Estate Investment Indicator Oct % Car Purchase Indicator Oct % Employment Outlook Indicator Oct % Inflation Expectations Indicator series high % Current Prices Satisfaction Indicator Sep % Interest Rates Expectations Indicator series high %

9 MNI Russia Consumer Report - December All Russia - Summary Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec MNI Russia Consumer Indicator Current Indicator Expectations Indicator Personal Finance: Current Personal Finance: Expected Business Condition: 1 Year Business Condition: 5 Years Durable Buying Conditions Current Business Conditions Indicator Real Estate Investment Indicator House Price Expectations House Buying Sentiment House Selling Sentiment Car Purchase Indicator Car Purchase Expectations Price of Gasoline Expectations Employment Outlook Indicator Inflation Expectations Indicator Current Prices Satisfaction Indicator Interest Rates Expectations Indicator

10 10 MNI Russia Consumer Report - December 2014 All Russia - Records Current Minimum Maximum Mean Median MNI Russia Consumer Indicator Current Indicator Expectations Indicator Personal Finance: Current Personal Finance: Expected Business Condition: 1 Year Business Condition: 5 Years Durable Buying Conditions Current Business Conditions Indicator Real Estate Investment Indicator House Price Expectations House Buying Sentiment House Selling Sentiment Car Purchase Indicator Car Purchase expectations Price of Gasoline expectations Employment Outlook Indicator Inflation Expectations Indicator Current Prices Satisfaction Indicator Interest Rates Expectations Indicator

11 Russia consumer sentiment improved from a series low in December. The MNI Russia Consumer Indicator rose by 4.2% on the month to 79.8 in December from 76.6 in November.

12 12 Spitzzeile Titel Economic Landscape At the conclusion of an after-hours meeting running into the early morning of December 16, the Central Bank of Russia surprised markets with a 650 basis point rate hike. What followed was one of the most volatile trading days in the rouble s history, referred to as Black Tuesday.

13 MNI Russia Consumer Report - December At the conclusion of an after-hours meeting running into the early morning of December 16, the Bank of Russia surprised markets with a 650 basis point rate hike. What followed was one of the most volatile trading days in the rouble s history, referred to as Black Tuesday, with the currency shrugging off an early rally in the order of 10% to be down as low as 80.1 roubles per US dollar. The rouble has since recovered to around 60 roubles per dollar following a further package of measures to support the banking sector, including liquidity injections, looser capital requirements and the prospect of large-scale recapitalisation. What remains clear though is that the Russian economy remains under massive pressure from a perfect storm in financial and geopolitical conditions, not least falling oil prices and Western sanctions. The Russian economy contracted in November and the weakening in the rouble and falling oil prices since September point to an economic contraction for Q4 as a whole. The sustained fall in oil prices and the increasing likelihood that sanctions will remain in place at least for the next year has prompted Russia s Economic Development Ministry to downgrade their economic growth forecast for In December, consumer price inflation rose to the highest level since August 2009 as the ban on Western food imports continued to push up food prices. Economic growth slows The latest GDP figures from the Economic Development Ministry revealed that the economy contracted 0.5% in November. The fall reflects a sustained fall in the price of oil and the continuing currency crisis and suggests more pain ahead for Q4 GDP. Third quarter GDP data released by the Federal Statistics Service showed that the economy grew by 0.7% in the three months to September from 0.8% in the previous quarter. The slowdown in growth was, however, much more muted than many had anticipated given the imposition of Western sanctions and the food ban on the economy. A more granular look at GDP over the quarter reveals that the resilience of the economy can be attributed to a good harvest and robust industrial production on the back of import substitution and the commencement of a gas pipeline project to China. Nevertheless, since the end of Q3, Russia has been hit by a significant weakening in the rouble and a slide in oil prices which Economic Growth Contribution to Economic Growth 15% 10% 5% 0% -5% -10% -15% GDP Growth Y/Y % Source: Federal State Statistics Service 20% 15% 10% 5% 0% -5% -10% -15% -20% -25% -30% Q Discrepancies Net Exports PFCE Q Source: Federal State Statistics Service Q GFCF GFCE Inventories Q Q Q GDP Growth Q/Q %

14 14 MNI Russia Consumer Report - December 2014 will likely take their toll on the economy. Given the already noticeable effect on November s result, we anticipate a contraction on the year in the final quarter of 2014 before slipping into recession in Russia s Economic Development Ministry had predicted GDP growth of 2.5% this year before the turmoil in Ukraine. This has, though, been dramatically reduced to just 0.5%, following paltry growth of 1.3% in Recently, the economy ministry revised their forecast for 2015 to -0.8%, considerably down from its previous estimate of 1.2%. The ministry cited reduced expectations for the price of oil from $100 to $80 a barrel combined with the likelihood that sanctions will remain in place throughout 2015 for the downward revision. Industrial production contracts in November Industrial production fell by 0.4% on the year in November following growth of 2.9% in October. On a monthly basis, industrial production fell by 0.2% in November after growing by 5.1% in October. The decline was led by manufacturing output, which contracted by 3% on the year in November after rising 3.6% in the month before. The Russian ban on Western food imports had provided a boost to domestic food manufacturers earlier in the year, however in November the impact was notably absent, with food product manufacturing down 1.8% on the year. The biggest boost to industrial production came from utilities output, which grew by 7% on the year in November following growth of 2.8% in October as construction continued on a new gas pipeline to China following the signing of a $400 billion contract in May. Growth in mining and quarrying output picked up slightly, increasing 2.5% on the year in November from 1.9% in the previous month. In the 11 months to November, industrial production grew 1.5% on the year compared with growth of 0.5% in the same period a year ago. Inflation and Interest Rate 16% 14% 12% 10% 8% 6% 4% 2% 0% CPI Y/Y%* 7-day repo rate (RHS)** % 16% 14% 12% 10% Inflation rises in December Consumer price inflation accelerated to 11.4% in December from 9.06% in November, the highest since August Following a ban on food imports from Western nations, food price inflation rose to 15.4% in December. Even after stripping out the prices of food and fuel, core inflation has also been high recently. In November it accelerated to 8.9% from 8.4% in the previous month, the highest since November Russia s Economy Ministry has recently forecast that inflation will remain in double digits throughout 2015 and will gradually slow to 10% by the end of the year. Key Policy Rate at 17% In a surprise move, the Bank of Russia increased the key interest rate by 650 basis points to 17% in the very early hours of the morning on December 16. The move came just days after its meeting on December 11, when it had increased rates by 100 basis points to 10.5%. Any success in the attempt to stem the slide in the rouble was short-lived however, with the rouble relinquishing all of the 10% gain seen directly after the announcement in the next day s trading, plus more. The central bank has now raised the benchmark Source: *Federal State Statistics Service, **Central Bank of Russia 8% 6% 4% 2% 0%

15 MNI Russia Consumer Report - December Car Sales 200% 150% 100% Car Scrappage Schemes 20% 15% 10% of measures to support the banking sector, including liquidity injections, looser capital requirements and the prospect of large-scale recapitalisation. The moves have had some traction with the rouble subsequently improving to around 60 roubles per US dollar in early January. 50% 0% -50% -100% % -10% interest rate six times since the onset of the Ukraine crisis in February 2014 by a total of 1,150 basis points. What was notably absent from the statement after the central bank meeting of December 11, when rates were increased just 100 basis points, was any acknowledgement that affirmative action was required to tackle the pronounced rout in the rouble. Central bank governor Elvira Nabiullina said that the rate rise was to curb inflation, rather than to steady the currency and commented that the rouble was undervalued by fundamental measures and would take time to appreciate. Rouble hits record low The rouble fell to an all-time intraday low of 80.1 against the US dollar on December 16 after the central bank s decision the night before to raise interest rates by 650 basis points caused a wave of speculative betting against the currency. Following an intraday fall in the exchange rate to as low as 80.1, the currency finished the day trading at around 67.9 roubles per US dollar. The authorities were forced to intervene again with a further package Car and Light Commercial Vehicles Sales Y/Y %* Price of Imported Cars Y/Y % (RHS)** Source: *Association of European Businesses, ** Federal State Statistics Service % 0% Trade surplus grows in November Russia s trade surplus widened to $14.4 billion in November, from $13.6 billion a month earlier, and was below the $17 billion recorded a year earlier as imports fell more than exports amid weaker domestic demand. Exports fell to $37.6 billion in November, down from $40.5 billion, while imports fell to $23.2 billion in November from $26.9 billion in October. Russia is the second largest exporter of oil in the world, the fall in global oil prices therefore accounts for the steep 19.7% decline on the year in exports. Oil prices have continued to fall since September to below $50 a barrel in January, with the trend likely to continue in the months to come. Car sales fall in November In November, 229,439 cars were sold in Russia, 1.1% below the level in the same month a year earlier but up from a 9.9% contraction seen in the previous month. The 11 months to November saw a decline of 11.6% in car sales compared with the same period a year earlier. The government has recently introduced a car scrappage and trade-in scheme, in an attempt to kickstart the market. Under the programme, consumers who trade in a car which is at least six years old are eligible for a discount of at least 40,000 roubles off a new vehicle. While the government measures have not reversed the downward trend in car sales, it has certainly helped to mitigate it. November s decline is considerably below the 25.8% fall seen in August, one month before the introduction of the scrappage scheme.

16 16 MNI China Consumer Report - July 2013 Indicators Russia consumer sentiment recovered slightly in December due to a surge in willingness to purchase big-ticket items fuelled in part by the upcoming holiday season but also by some panic buying from consumers fearful that the purchasing power of the rouble was being eroded.

17 MNI Russia Consumer Report - December MNI Russia Consumer Indicator Up From All-Time Low 79.8 Russia consumer sentiment recovered slightly in December due to a surge in willingness to purchase big-ticket items fuelled in part by the upcoming holiday season but also by some panic buying from consumers fearful that the purchasing power of the rouble was being eroded. The MNI Russia Consumer Indicator rose by 4.2% on the month to 79.8 in December from a series low of 76.6 in November. Consumer sentiment has fallen sharply over the course of 2014 due to the Ukraine crisis and poor economic conditions in Russia in general. Three out of the five components which make up the Consumer Indicator improved in December, with the rise in headline sentiment led by households willingness to purchase big-ticket items. Following a sharp fall in November, there was also a bounce back in expectations for Business Conditions in One Year, although it still remains at a low level and shows pessimists outweighing optimists. Respondents were also slightly less pessimistic about the current state of their personal finances. The survey was taken before the Central Bank of Russia s decision to raise the key interest rate by 650 basis points to 17% on December 16 due to the plunge in the rouble, the impact of which will not be seen until the January survey. The CBR is expected to leave rates unchanged at its next meeting on January 30. Already in December both inflation and interest rate expectations hit a record high. MNI Russia Consumer Indicator Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Current and Expectations Indicators Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Current Expectations MNI Russia Consumer Indicator Dec-13 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 MNI Russia Consumer Indicator Current Expectations

18 18 MNI Russia Consumer Report - December 2014 All Russia West Siberian Total Indicator Current Indicator Expectations Indicator Total Indicator Current Indicator Expectations Indicator Central Russia Volga Total Indicator Current Indicator Expectations Indicator Total Indicator Current Indicator Expectations Indicator Urals North Caucasus Total Indicator Current Indicator Expectations Indicator Total Indicator Current Indicator Expectations Indicator

19 MNI Russia Consumer Report - December While respondents were less pessimistic about the outlook for business conditions over the coming year, sentiment on the current business environment fell to a record low in December. They were also increasingly pessimistic about business conditions over a five-year time horizon. Consumer Indicator: Contribution to Monthly Change (% pt.) 3.2 Durable Buying Conditions Latest official data revealed that the Russian economy shrank by 0.5% in November, the first contraction since October Growth is expected to remain negative in the final quarter of 2014 as well, hit by the lower oil prices and the impact of western economic sanctions. This view is supported by the MNI Russia Consumer Indicator, which averaged just 79.0 in the three months to December, the lowest level in the survey s history Business Conditions: 5 Years Business Conditions: 1 Year Personal Finances: Expected Personal Finances: Current The Current Indicator, which measures consumers assessment of current conditions, rose to 80.6 in December from a series low of 72.5 in November, while the Expectations Indicator, which is made up of the three forward-looking components, remained unchanged at 79.2 this month. Regions Consumer sentiment rose in four out of the five major regions in December. The most significant improvement in consumer confidence was observed in the North Caucasus region, where the Consumer Indicator recovered from a series low of 71.8 to 87.4 in December. In contrast, optimism among residents of the Urals region fell to 69.9 in December from 74.0 in the previous month, the lowest level on record. Age Consumer sentiment improved from a record low in the previous month across all three age groups. Consumer confidence among the youngest age group rose for the first time in three months in December.

20 20 MNI Russia Consumer Report - December 2014 The Consumer Indicator for the year old age range increased by 4% to 80.8 in December from 77.7 in November. Our panel were much more willing to purchase large household items and expected to see an improvement in business conditions in a year s time. Consumer Indicator: Age Groups Sentiment among the year old age range improved the most in December, rising by 4.4% to 79.6 from a record low of 76.2 in November. While a much greater proportion of our panel considered the conditions for making a big-ticket purchase had improved, their expectations for household finances fell to the lowest level on record. The Consumer Indicator for year olds, the oldest of the three age groups, rose by 3.3% to 76.3 in December from 73.8 in November. Consumers expectations for the business environment in one year rose sharply, contributing the most to the improvement in overall sentiment for this age group while they had a much poorer outlook for longer term business conditions. Income In December, consumer confidence recovered from a record low among low income households, although sentiment among high income households declined further to a new series low All Indicator fell to series lows. Despite a worsening in personal finances, consumers were willing to spend on big ticket items. Compared with the previous year, confidence was 17.7% down among lower income households, while for higher income households it was 15.9% lower. On average, confidence remains greater for higher income households. Our survey has shown that lower income households have been hit the most by the current political and economic tensions. Consumer confidence for households with an average annual income under RUB 480,000 rose to 77.1 in December from a record low of 72.5 in November. Although all five components of the Consumer Indicator remained below the 100 mark that separates optimists from pessimists, expectations about household finances worsened on the month. For households with an average annual income above RUB 480,000, consumer confidence fell marginally to a fresh series low of 83.4 in December from the previous all-time low of 83.5 in November. Three out of the five components which make up the Consumer

21 MNI Russia Consumer Report - December MNI Russia Consumer Indicator Income Groups < RUB 480,000 Per Annum Total Indicator Current Indicator Expectations Indicator > RUB 480,000 Per Annum Total Indicator Current Indicator Expectations Indicator

22 22 MNI Russia Consumer Report - December 2014 MNI Russia Consumer Indicator Main Cities The Consumer Indicator rose in eight out of the ten major cities surveyed although remained below the 100 breakeven level in each city indicating respondents were still pessimistic. In the capital, Moscow, consumer sentiment rose to 89.6 in December after falling to a series low of 78.9 in the previous month. All five components of the headline indicator increased, with willingness to purchase large household items leading the rise in sentiment. In Saint Petersburg, the second largest city in Russia, consumer sentiment improved to 90.9 in December from an all-time low of 88.5 in November. While the rise in sentiment was led by consumers short-term expectations for business conditions, their long-term expectations fell to the lowest in the survey s history. Consumer Indicator - Moscow Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Consumer Indicator Components - Moscow Consumer confidence in Novosibirsk, the third largest city by population in Russia, grew to 74.2 in December from 69.5 in November. All five components posted an improvement this month apart from consumers expectations for personal finances. Consumers perceptions surrounding the future business environment improved in the short-term, although both the short and long-term business indicators remained under the 100 breakeven level. In contrast, consumer sentiment worsened in Samara and Omsk. In Samara, a major industrial hub, the Consumer Indicator fell to a record low of 68.6 from 74.4 in November. Residents of the city were only mildly optimistic about purchasing large household items, with the Durable Buying Conditions Indicator at while the remaining four components of the Consumer Indicator remained below Current Indicator Expectations Indicator Personal Finances: Current Personal Finances: Expectations 76.8 Business Conditions: 1 Year 93.5 Business Conditions: 5 Years Durable Buying Conditions

23 MNI Russia Consumer Report - December Consumer Indicator - Saint Petersburg 105 Consumer Indicator - Novosibirsk Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Consumer Indicator Components - Saint Petersburg Consumer Indicator Components - Novosibirsk Current Indicator Expectations Indicator Personal Finances: Current Personal Finances: Expectations Business Conditions: 1 Year Business Conditions: 5 Years Durable Buying Conditions Current Indicator Expectations Indicator Personal Finances: Current Personal Finances: Expectations Business Conditions: 1 Year Business Conditions: 5 Years Durable Buying Conditions

24 24 MNI Russia Consumer Report - December 2014 Personal Finances Lower Expectations for Finances 70.8 Household finances remained firmly in contraction in December as the high rate of inflation and poor job market continued to place considerable pressure on Russian consumers. The Current Personal Finances Indicator, which measures whether households are better or worse off than a year ago, ticked up slightly to 70.8 in December from a record low of 67.0 in November. Consumers personal finances have significantly weakened over 2014 and in December they were 23.4% below the level seen a year ago. 75% of respondents reported that their Current Personal Finances worsened in December. The majority of consumers cited higher household expenses as the main reason behind the deterioration in their financial situation. Over the course of 2014, consumers experienced high inflation and a weak rouble which has hit disposable incomes and savings a trend which appears likely to continue in In December, 99.7% of respondents spent % of their monthly household income on daily expenses, the highest in the history of the survey, while almost a third of our panel reported that they were not saving any of their monthly income. Personal Finances Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Current Expectations Current Financial Situation Compared with 1 Year Ago (% of Households) 0.3% 16.6% 8.1% Expected Personal Finances, which measures whether households think their finances will be better in a year s time, fell to 84.7 in December from 88.2 in November, significantly below the series average of % Much Better A Little Better Same A Little Worse Much Worse Don t Know/No Answer Personal Finances Dec-13 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Current Expectations

25 MNI Russia Consumer Report - December How Households Spend their Money Daily Expenses (% of Households) Monthly Household Income Used for Large Loan Repayment (% of Households) 0.3% 0.1% 7.8% 99.7% 92.1% 0% - 29% of Income 50% - 69% of Income 0% of Income 30% - 49% of Income 30% - 49% of Income 70% - 100% of Income 1% - 29% of Income 50% - 100% of Income Monthly Household Income Used for Savings (% of Households) Monthly Household Income Used for Investments (% of Households) 0.1% 31.1% 21.0% 68.9% 78.9% 0% of Income 30% -49% of Income 0% of Income 30% - 49% of Income 1% - 29% of Income 50% - 100% of Income 1% - 29% of Income 50% - 100% of Income

26 26 MNI Russia Consumer Report - December 2014 Business Conditions Current Business Environment Worst on Record 83.2 With little sign of Western economic sanctions being lifted in the short-term and the persistent weakness of the rouble, respondents reported that current business conditions were in the worst state since the survey began in March The Current Business Conditions Indicator, which measures respondents views on the state of business compared with a year earlier, fell to a record low of 83.2 in December from 85.4 in November. More than one-third of respondents thought that business conditions were poor, while only 4.2% of our panel thought that conditions were good. Following the annexation of Crimea and the conflict in Eastern Ukraine, Western nations implemented economic sanctions against Russia s finance, energy and weapons industries. In retaliation, Russia introduced a ban on certain food imports from the West. Relations between Russia and the West remain very strained, making the likelihood of a reversal in policy by either party very slim in the medium-term. While expectations about Business Conditions in One Year improved to 69.6 in December from an all-time low of 62.3 in November, it remained firmly in contraction and significantly below the series average of Consumers were increasingly pessimistic about longterm business conditions, as probably the majority of consumers anticipate that the current downturn will have lasting repercussions on Russia s business environment. The Expectations for Business Current Business Conditions Indicator Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Expected Business Conditions Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 1 Year 5 Years Business Conditions Dec-13 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Current In 1 Year In 5 Years

27 MNI Russia Consumer Report - December Business Conditions in 1 Year Conditions in Five Years Indicator fell to 83.4 in December from 87.2 in November. All Russia Respondents from nine of the 10 major cities surveyed were pessimistic about longer term business conditions, with residents of Samara being the least hopeful about future business conditions. 92.4% 82.9% 7.6% Nov % Dec-14 Better Worse All Russia, Reasons for Better All Russia, Reasons for Worse 38.6% 33.5% 30.0% 26.8% 16.6% 19.0% 18.7% 7.1% 4.1% 5.1% 0.6% Government/Policy Resource/Environment Government/Policy Resource/Environment Econ. Development Social Stability/ Security Econ. Development Social Stability/ Security Income/Employment Events Income/Employment Events

28 28 MNI Russia Consumer Report - December 2014 Business Conditions in 1 Year Regions Business Expectations: Worse or Better? (% of Respondents) 80.5% 71.7% 94.7% 78.4% 96.0% 19.5% 28.3% 5.3% 21.6% 4.0% Central North Caucasus Urals Volga West Siberian Better Worse Reasons for Better (% of Respondents) Reasons for Worse (% of Respondents) Central North Caucasus Urals Volga West Siberian Central North Caucasus Urals Volga West Siberian Government/Policy Resource/Environment Government/Policy Resource/Environment Econ. Development Social Stability/ Security Econ. Development Social Stability/ Security Income/Employment Events Income/Employment Events

29 MNI Russia Consumer Report - December Durable Buying Conditions Highest Since September 90.4 The plunge in the currency, high level of inflation and the upcoming holiday season sparked a surge in the willingness to buy large household items in December, although respondents overall remained pessimistic. Weak household finances, the heightened cost of credit and the impact of the weak rouble on the cost of imported goods have restrained consumers purchasing power over the year. Since the onset of the Ukraine crisis in February 2014, the CBR has raised the benchmark interest rate six times by a total of 1,150 basis points which has increased the cost of credit for consumers. Nevertheless, willingness to purchase a large household item rose significantly in December as consumers looked to place their roubles into investments as the Russian currency crisis moved up a gear. Reports have highlighted that consumers are keen to purchase items such as white goods or other household items rather than see the value of their savings erode. The Durable Buying Conditions Indicator rose to 90.4 in December from a series low of 78.1 in November. Durable Buying Conditions Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Is It a Good or Bad Time to Buy Large Household Goods? (% of Households) 1.4% 35.7% Respondents are asked whether they believe it is a good or bad time to purchase a large consumer durable, and a result below 100 means that a higher percentage of respondents view it as a bad time. The indicator remained below the 100 level in December for the fifth consecutive month and was around 8.6% below the level seen a year ago. 55.0% Excellent Time Good Time Neutral 7.8% Bad Time Very Bad Time Don t Know/No Answer Durable Buying Conditions Dec-13 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Durable Buying Conditions

30 30 MNI Russia Consumer Report - December 2014 Employment Outlook Deteriorates in December 81.8 Amid mounting concerns surrounding the slowdown of the Russian economy, consumers became increasingly pessimistic in their outlook for the job market. The Employment Outlook Indicator, which measures opinion on the outlook for the employment market over the next 12 months, fell to 81.8 in December from 86.4 in November. Views on the labour market have deteriorated significantly over the past year, particularly since the onset of the Ukraine crisis, with expectations for the job market in 2014 averaging 6.1% below that of the series average. All regions, except West Siberian, reported a further deterioration in the jobs market, with the indicator remaining firmly in contraction across Russia. Official statistics showed that the unemployment rate rose marginally to 5.2% in November from 5.1% in October. Results from the December edition of our sister survey on Moscow Exchange-listed Russian businesses showed that employment conditions deteriorated to an 11-month low, with companies choosing to scale back their workforces in light of the tough economic climate. Employment Outlook Indicator Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Employment Outlook for the Next 12 Months (% of Households) 29.3% 6.7% 2.9% 6.2% 55.0% Much Better A Little Better Same A Little Worse Much Worse Don t Know/No Answer Employment Outlook Dec-13 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Employment Outlook

31 MNI Russia Consumer Report - December Prices Sentiment Inflation Expectations Reach All-Time High 59.3 The majority of our panel of consumers were dissatisfied with the current level of prices and expected prices to increase over the next 12 months rose. The Current Prices Satisfaction Indicator remained broadly stable at 59.3 in December compared with 59.2 in November, the highest in three months. Consequently, dissatisfaction in the final quarter of 2014 was the highest in the survey s history. A figure below 100 indicates wider dissatisfaction with the current level of prices. The further below 100, the greater the dissatisfaction. The indicator has remained below 100 since the survey started, and in December it was 17.4% below the level seen a year earlier, with 61.3% of respondents dissatisfied with the current level of prices. Official data showed that consumer price inflation accelerated to 11.4% on the year in December from 9.1% in November, the highest since August A ban on food imports from Western nations, in retaliation to sanctions placed upon Russia, caused food price inflation to reach 15.4% on the year in December which makes up more than a third of the basket. The indicator measuring consumers expectations for inflation in 12 months time rose to a record high of in December from previously. Consumers inflation expectations have trended upwards since the start of the survey in March 2013 and in December they were substantially above the series average of Satisfaction with Current Prices Indicator Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Inflation Expectations Indicator Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Prices Sentiment Dec-13 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Satisfaction with Current Prices Inflation Expectations

32 32 MNI Russia Consumer Report - December 2014 Prices Sentiment Regions Over the course of 2014, the Central Bank of Russia raised the official interest rate by 1,150 basis points to 17% in a bid to control inflation and stabilise the rouble. Under the central bank s most recent baseline scenario, which seems quite optimistic, inflation is forecast to be between 8.2% and 8.7% in 2015 and is not anticipated to fall to the medium-term target of 4% until the end of Since October 2013, most respondents had thought prices would rise between 11-24% over the next year, but this has changed in recent months with most consumers now expecting larger price increases. In December, about 30% of respondents believed that prices would rise by 25% or more over the next year. Satisfaction with Current Prices (% of Households) 25.6% 35.7% 0.2% 5.4% 33.2% Regions Satisfaction with Current Prices hit record lows in the Central, North Caucasus and West Siberian regions in December. The sharpest decline in price sentiment was in the North Caucasus region where almost 70% of respondents were discontent with prices, the highest on record. Very Satisfied Quite Satisfied So So Not Very Satisfied Not Satisfied At All Inflation Expectations in 12 Months (% of Households) Don t Know/No Answer Residents from Urals and Volga had higher expectations for inflation in December, enough to push inflation expectations for Russia as a whole to the highest on record. There was a sharp rise in inflation expectations among consumers of the Urals region, offsetting the ease seen in the previous month. 85.4% of respondents in the Urals region expected prices to rise over the next 12 months, a significant proportion of whom expected that prices would rise by 25% or more. 20.0% 2.8% 4.5% 28.2% 44.6% Much Higher A Little Higher Same A Little Lower Much Lower Don t Know/No Answer

33 MNI Russia Consumer Report - December Inflation Expectations Indicator Expected Change in Prices in 1 Year (% of Households) All Russia Central North Caucasus Urals Volga West Siberian Central North Caucasus Urals Volga West Siberian Much Higher Same Much Lower A Little Higher A Little Lower Don t Know/No Answer Current Prices Satisfaction Indicator Satisfaction with Current Prices (% of Households) All Russia Central North Caucasus Urals Volga West Siberian All Russia Central North Caucasus Urals Volga West Siberian Very Satisfied Quite Satisfied Neutral Not Very Satisfied Not Satisfied At All Don t Know/No Answer

34 34 MNI Russia Consumer Report - December 2014 Interest Rate Expectations Record High Expectations for interest rates rose to the highest in the survey s history, just prior to a dramatic rate hike by the central bank to stem the depreciation in the rouble. The Interest Rate Expectations Indicator rose to a series high of in December from in November and was 15.6% higher than the level recorded a year earlier. The indicator has remained above 100 since the survey started in March 2013, indicating that more households expected interest rates to rise than fall in the coming year. Since the onset of the Ukraine crisis in February 2014, the Central Bank of Russia has raised the benchmark interest rate six times by a total of 1,150 basis points. Most recently, the CBR raised the key interest rate in a surprise move by 650 basis points to 17% in the very early hours of the morning on December 16 after our survey period had closed. Governor Nabiullina stated that the emergency hike was aimed at limiting substantially increased rouble depreciation and inflation risks. The CBR is due to meet next on January 30 where it is widely expected to retain the current interest rate following the recent dramatic policy tightening. The central bank could face increased pressure through 2015 to raise rates further should the rouble resume its slide and inflation accelerate to unsustainable levels. Interest Rate Expectations Indicator Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Expected Change in Interest Rate in 1 year (% of Households) 42.7% 2.5% 7.0% 20.5% 27.3% In December, almost half of our panel expected interest rates on home and car loans in a year s time to be higher, up from 38.6% in November, while 42.7% of respondents expected interest rates to remain the same. Much Higher A Little Higher Same A Little Lower Much Lower Don t Know/No Answer Interest Rate Expectations Dec-13 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Interest Rate Expectations

35 MNI Russia Consumer Report - December Real Estate Investment Expectations for House Prices At All-Time High Consumers perception of the real estate market improved in December albeit as the uncertainty surrounding the Russian economy increased. Three quarters of respondents expected house prices to increase, prompting them to consider it a good time to purchase a house in the next six months. The Real Estate Investment Indicator, which is made up of three components (House Price Expectations, House Buying Sentiment and House Selling Sentiment) rose to in December from a series low of in November. The House Price Expectations component, which measures the outlook for prices over the coming six months, rose to in December from in November, the highest in the history of the survey. Real Estate Investment Indicator Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Amid heightened expectations for house prices and the volatility in the rouble, it is perhaps unsurprising that a greater proportion of our panel considered it a good time to buy a house. While consumer sentiment remained downbeat in December, House Buying Sentiment jumped to 83.4 in December from a record low of 71.0 in November. In spite of the increase, pessimists still outnumbered optimists, a trend seen for a year now. Real Estate Investment Indicator: Contribution to Monthly Change (% pt.) House Selling Sentiment 0.3 Given the uncertain economic outlook, slightly fewer respondents believed it would be a good time to sell a house. This was shown in House Selling Sentiment, a measure of whether it is a good time to sell a house in the next six months, which has a negative impact on overall housing sentiment. House Selling Sentiment House Buying Sentiment House Price Expectations Real Estate Investment Sentiment Dec-13 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Real Estate Investment Sentiment Price Expectations House Buying House Selling

36 36 MNI Russia Consumer Report - December 2014 Real Estate Investment Components and Balances moderated to in December after reaching an all-time high of in November. Real Estate Investment Indicator - Components Regions The Real Estate Investment Indicator improved across all five regions in December. The indicator crossed the 100 threshold in North Caucasus, Urals and Volga, likely reflecting the panic buying of Russian consumers The number of pessimists outnumbered optimists only in the West Siberian region, albeit by a very slim margin, with the indicator remaining below 100 while sentiment in the remaining four regions was above 100. Real Estate Investment Indicator House Price Expectations House Buying Sentiment House Selling Sentiment November 2014 December 2014 Real Estate Prices: Expected Changes in the Next 6 Months Expected Changes in Real Estate Prices in the Next 6 months (% of Households) Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 All Russia Central North Caucasus Urals Volga Go Up Dramatically Go Up Slightly Stay the Same Gow Down Slightly Go Down Sharply Don t Know/No Answer

37 MNI Russia Consumer Report - December House Buying Sentiment Reasons for Buying Houses (% of Households) % % 36.3% Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec % 4.7% Prices Income/Purchasing Power Investment Value Policy/Interest Rate Supply and Quality Others House Selling Sentiment Timing for Selling Houses (% of Households) % % 8.0% 17.1% % Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Excellent Time Good Time Neutral Bad Time Very Bad Time Don t Know/No Answer

38 38 MNI Russia Consumer Report - December 2014 Car Purchase Car Purchase Expectations At Breakeven level 73.7 Slightly more consumers thought that it would be a good time to purchase a car in the next 12 months as a government scrappage scheme incentivised sales of new vehicles, although heightened expectations for the price of gasoline continued to have a negative bearing on sentiment. The Car Purchase Indicator, which is made up of two components (Car Purchase Expectations and Expectations for the Price of Gasoline), increased to 73.7 in December from a record low of 71.3 in November. The Car Purchase Expectations component, which gauges whether consumers believe it is a good or bad time to purchase a car over the next 12 months, rose by 6.8% in December to after dropping to 93.6 in the previous month. Respondents were divided about their opinion on purchasing a car in the next year. 50% of respondents thought it would be a good time to purchase a car in the next 12 months but an almost equal proportion thought that it would be bad. Better supply and quality encouraged respondents to believe it would be good to purchase a car while high cost of use and low income deterred others. Some of the improvement could be attributed to the introduction of the government s car scrappage and trade-in scheme at the beginning of September. Under this scheme, cars that are at least six years old can be demolished or traded in return for payment towards the purchase of a new car. Furthermore, the volatility of the rouble may also have been an influence, prompting consumers to transfer their wealth into more stable assets such as automobiles. Car Purchase Indicator Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Car Purchase Indicator - Components Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Car Purchase Expectations Price of Gasoline Car Purchase Sentiment Dec-13 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Car Purchase Sentiment Car Purchase Expectations Price of Gasoline

39 MNI Russia Consumer Report - December Reasons for a Good Time to Buy a Car (% of Households) Reasons for a Bad Time to Buy a Car (% of Households) All Russia Central North Caucasus Urals Volga West Siberian All Russia Central North Caucasus Urals Volga West Siberian Prices Policy/Interest Rate Cost of Use/Upkeep Prices Policy/Interest Rate Cost of Use/Upkeep Income/Purchasing Power Supply and Quality Others Income/Purchasing Power Supply and Quality Others Official data showed car sales declined 1.1% in November on the year, a marked improvement from the 9.9% annual contraction seen in the previous month. The improvement is likely the result of consumers bringing forward car purchases in anticipation of higher prices next year as the slide in the rouble has yet to be priced in. While the slide in global oil prices has reduced gasoline prices in many countries, the extension of excise taxes on Russian gasoline production in 2015 means that consumers are likely to face higher fuel costs in the months ahead. Expected Change in the Price of Gasoline (% of Households) 0.3% 4.6% 15.6% 26.1% As a consequence, a greater proportion of Russian consumers expected gasoline prices to rise in the next 12 months. Expectations for the Price of Gasoline rose to a new series high of in December, slightly higher than recorded in November. Go Up Dramatically Go Up Slightly 53.3% Stay the Same Go Down Slightly Go Down Sharply Don t Know/No Answer

40 40 MNI Russia Consumer Report - December 2014 MNI Russia Consumer Indicator Regions Consumer Indicator: North Caucasus Consumer Indicator Components: North Caucasus Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Current Indicator Expectations Indicator Personal Finances: Current Personal Finances: Expectations Business Conditions: 1 Year Business Conditions: 5 Years Durable Buying Conditions Consumer Indicator: West Siberian Consumer Indicator Components: West Siberian Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Current Indicator Expectations Indicator Personal Finances: Current Personal Finances: Expectations Business Business Conditions: 1 Conditions: 5 Year Years Durable Buying Conditions

41 MNI Russia Consumer Report - December Consumer Indicator: Volga Consumer Indicator Components: Volga Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Current Indicator Expectations Indicator Personal Finances: Current Personal Finances: Expectations Business Conditions: 1 Year Business Conditions: 5 Years Durable Buying Conditions Consumer Indicator: Central Consumer Indicator Components: Central Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Current Indicator Expectations Indicator Personal Finances: Current Personal Finances: Expectations Business Conditions: 1 Year Business Conditions: 5 Years Durable Buying Conditions

42 42 MNI Russia Consumer Report - December 2014 Consumer Indicator: Urals Consumer Indicator Components: Urals Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Current Indicator Expectations Indicator Personal Finances: Current Personal Finances: Expectations Business Conditions: 1 Year Business Conditions: 5 Years Durable Buying Conditions Employment Indicator Outlook for the Next 12 Months (% of Households) Interest Rates Expectations Indicator (% of Households) Central North Caucasus Urals Volga West Siberian Central North Caucasus Urals Volga West Siberian Much Better About the Same Much Worse Much Better About the Same Much Worse A Little Better A Little Worse Don t Know/No Answer A Little Better A Little Worse Don t Know/No Answer

43 MNI Russia Consumer Report - December MNI Russia Consumer Indicator Income Groups < RUB 480,000 Per Annum < RUB 480,000 - Components Total Indicator Current Indicator Expectations Indicator Personal Finances: Current Personal Finances: Expectations Business Conditions: 1 Year Business Conditions: 5 Years Durable Buying Conditions November 2014 December 2014 > RUB 480,000 Per Annum > RUB 480,000 - Components Total Indicator Current Indicator Expectations Indicator Personal Finances: Current Personal Finances: Expectations Business Conditions: 1 Year Business Conditions: 5 Years Durable Buying Conditions November 2014 December 2014

44 44 MNI Russia Consumer Report - December 2014 What the Panel Said A selection of comments from the panel of consumers surveyed over the past month.

45 MNI Russia Consumer Report - December Karzan No one knows what will happen in the real estate market. 54-year-old male from Moscow Incomes are falling down, purchasing power has decreased. 21-year-old male from Balashikha Interests on all mortgages have increased for all mortgages. 33-year-old male from Podolsk Imported goods have become seriously more expensive. 21-year-old female from Podolsk The sanctions against Russia are an obstacle to economic development in the region. 61-year-old female from Domodedovo In the next year, I expect that prices will continue to grow. 19-year-old male from Domodedovo One need to buy expensive goods now, everything will become more expensive in the months to come. 32-year-old male from Alexandrov When purchasing a car, dealerships offer free additional options. 54-year-old female from Irkutsk In the new year the price of gasoline will rise due to government tax. 53-year-old female from Blagoveshchensk The Government does not know what it is doing, today one thing, tomorrow another thing. 61-year-old male from Kaliningrad Life become more expensive, I don t see a good future for the country. 28-year-old female from Pskov Only real estate can save the weakening in the rouble. 55-year-old male from Samara For builders the main thing is to sell houses, and then everything will go to pieces. 59-year-old male from Karzan One should buy big-ticket items now as the prices will grow. 59-year-old male from Nizhny Novgorod The Governent just talks, no activities, no deals, the country is heading towards a precipice. 63-year-old male from Novosibirsk My companies financial situation is unstable, I worry that I won t have a job soon. 28-year-old female from Irkutsk

46 46 MNI China Consumer Report - July 2013 Data Tables A closer look at the data from the December consumer survey.

47 MNI Russia Consumer Report - December Russia - Central Overview Oct-14 Nov-14 Dec-14 Highest Since Lowest Since 3-Month Average Monthly Change Monthly % Change Russia - Central Consumer Indicator Oct % Current Indicator Oct % Expectations Indicator Oct % Personal Finance: Current Oct % Personal Finance: Expected series low % Business Condition: 1 Year Oct % Business Condition: 5 Years series low % Durable Buying Conditions Oct % Current Business Conditions Indicator series low % Real Estate Investment Indicator Sep % Car Purchase Indicator Oct % Employment Outlook Indicator series low % Inflation Expectations Indicator Oct % Current Prices Satisfaction Indicator series low % Interest Rates Expectations Indicator series high %

48 48 MNI Russia Consumer Report - December 2014 Russia - Urals Overview Oct-14 Nov-14 Dec-14 Highest Since Lowest Since 3-Month Average Monthly Change Monthly % Change Russia - Urals Consumer Indicator series low % Current Indicator Oct % Expectations Indicator series low % Personal Finance: Current Oct % Personal Finance: Expected Oct % Business Condition: 1 Year Jun % Business Condition: 5 Years Oct % Durable Buying Conditions Oct % Current Business Conditions Indicator Aug % Real Estate Investment Indicator Oct % Car Purchase Indicator Oct % Employment Outlook Indicator Oct % Inflation Expectations Indicator Aug % Current Prices Satisfaction Indicator Jun % Interest Rates Expectations Indicator Oct %

49 MNI Russia Consumer Report - December Russia - Volga Overview Oct-14 Nov-14 Dec-14 Highest Since Lowest Since 3-Month Average Monthly Change Monthly % Change Russia - Volga Consumer Indicator Jul % Current Indicator Oct % Expectations Indicator Jul % Personal Finance: Current series low % Personal Finance: Expected Jul % Business Condition: 1 Year Jun % Business Condition: 5 Years Oct % Durable Buying Conditions Jul % Current Business Conditions Indicator Sep % Real Estate Investment Indicator Oct % Car Purchase Indicator Oct % Employment Outlook Indicator Oct % Inflation Expectations Indicator Apr % Current Prices Satisfaction Indicator series high % Interest Rates Expectations Indicator series high %

50 50 MNI Russia Consumer Report - December 2014 Russia - North Caucasus Overview Oct-14 Nov-14 Dec-14 Highest Since Lowest Since 3-Month Average Monthly Change Monthly % Change Russia - North Caucasus Consumer Indicator Sep % Current Indicator Jul % Expectations Indicator Sep % Personal Finance: Current Jul % Personal Finance: Expected Oct % Business Condition: 1 Year Jul % Business Condition: 5 Years Aug % Durable Buying Conditions Sep % Current Business Conditions Indicator series low % Real Estate Investment Indicator Jul % Car Purchase Indicator Oct % Employment Outlook Indicator Oct % Inflation Expectations Indicator series low % Current Prices Satisfaction Indicator series low % Interest Rates Expectations Indicator series high %

51 MNI Russia Consumer Report - December Russia - West Siberian Overview Oct-14 Nov-14 Dec-14 Highest Since Lowest Since 3-Month Average Monthly Change Monthly % Change Russia - West Siberian Consumer Indicator Oct % Current Indicator series low % Expectations Indicator Oct % Personal Finance: Current series low % Personal Finance: Expected series low % Business Condition: 1 Year series low % Business Condition: 5 Years Jun % Durable Buying Conditions Oct % Current Business Conditions Indicator series low % Real Estate Investment Indicator Oct % Car Purchase Indicator May % Employment Outlook Indicator Sep % Inflation Expectations Indicator Oct % Current Prices Satisfaction Indicator series low % Interest Rates Expectations Indicator Jun %

52 52 MNI Russia Consumer Report - December 2014 All Russia - Overview by Age Oct-14 Nov-14 Dec-14 Highest Since Lowest Since 3-Month Average Monthly Change Monthly % Change Age MNI Russia Consumer Indicator Oct % Current Indicator Oct % Expectations Indicator Sep % Personal Finance: Current Oct % Personal Finance: Expected Oct % Business Condition: 1 Year Oct % Business Condition: 5 Years Oct % Durable Buying Conditions Sep % Age MNI Russia Consumer Indicator Sep % Current Indicator Oct % Expectations Indicator Oct % Personal Finance: Current Oct % Personal Finance: Expected series low % Business Condition: 1 Year Oct % Business Condition: 5 Years Oct % Durable Buying Conditions Oct % Age MNI Russia Consumer Indicator Oct % Current Indicator Aug % Expectations Indicator Oct % Personal Finance: Current Oct % Personal Finance: Expected Sep % Business Condition: 1 Year Jun % Business Condition: 5 Years series low % Durable Buying Conditions Aug %

53 MNI Russia Consumer Report - December All Russia - Overview by Income Oct-14 Nov-14 Dec-14 Highest Since Lowest Since 3-Month Average Monthly Change Monthly % Change < RUB 480,000 Per Annum MNI Russia Consumer Indicator Sep % Current Indicator Oct % Expectations Indicator Sep % Personal Finance: Current Oct % Personal Finance: Expected Oct % Business Condition: 1 Year Sep % Business Condition: 5 Years Sep % Durable Buying Conditions Oct % > RUB 480,000 Per Annum MNI Russia Consumer Indicator series low % Current Indicator Oct % Expectations Indicator series low % Personal Finance: Current series low % Personal Finance: Expected series low % Business Condition: 1 Year Aug % Business Condition: 5 Years series low % Durable Buying Conditions Oct %

54 54 MNI Russia Consumer Report - December 2014 Methodology The MNI Russia Consumer Sentiment Survey is a wide ranging monthly survey of consumer confidence across Russia. Data is collected through computer aided telephone interviews (CATI), with each interviewee selected randomly by computer. At least 1,000 interviews are conducted each month. The survey has been in place since March The survey adopts a similar methodology to the University of Michigan survey of U.S. consumer sentiment. The MNI Russia Consumer Indicator is derived from five questions, two on current conditions and three on future expectations: 1) Current personal financial situation compared to a year ago 2) Current willingness to buy major household items 3) Personal financial situation one year from now 4) Overall business conditions one year from now 5) Overall business conditions for the next 5 years Indicators relating to specific questions in the report are diffusion indices with 100 representing a neutral level, meaning positive and negative answers are equal. Values above 100 indicate increasing positivity while values below show increasing negativity.

55 Discovering trends in Emerging Markets MNI s Emerging Markets Indicators explore attitudes, perspectives and confidence in Russia, India and China. Our data and monthly reports present an advance picture of the economic landscape as perceived by businesses and consumers. Our indicators allow investors, economists, analysts, and companies to identify economic trends and make informed investment and business decisions. Our data moves markets. Insight and data for better decisions