Nothing to sell - no one to buy: the structural transformation of the economy is still slowing down

Rosstat has published fresh data on the processes that are taking place in the Russian economy under Western sanctions. Thus, industrial production in March increased by 3% compared to the same period last year and by 9.9% compared to February 2022.

However, at the same time, 40.9 thousand cars were produced in our country in March, which is 72.1% less than in March 2021. But even if we compare not with last year's figures, but with February of this year, the fall is 62.2%. Quarterly results: in the first three months of 2022, 244,000 passenger cars were produced in the Russian Federation, which is 33.2% less than in January-March 2021.

The reason for the fall is the shutdown of almost all car factories located in Russia.

In addition, retail sales growth slowed sharply in March to 2.2% from 5.7% in February.

Also, according to Rosstat, the real disposable cash income of citizens of the Russian Federation in January-March 2022 decreased by 1.2%, despite the fact that over the previous three quarters the indicator gradually recovered to pre-pandemic levels. On a quarterly basis, real incomes in the first three months of this year decreased by 27.8%, which was primarily due to the devaluation of the ruble and accelerating inflation.

Economist Dmitry Prokofiev comments on this situation in his channel:

“If someone does not understand, production is still“ holding on ”, but the“ consumer economy ”has already gone down (the car is its most obvious symbol), retail too - there is nothing to sell and there is no one to buy, well, income was the first to react. As long as everything is in line with the boss's vision - people's incomes should fall faster than the economy..."