Rubles have been burning a hole in Russians’ pockets at the fastest rate since sanctions against the country were announced this summer.
Consumers’ shopping spree prompted a 1.8% jump in retail sales in November, confounding expectations for a far smaller increase, Bloomberg reported.
With the currency falling off a cliff in the last couple of months, folks are spending their money before it’s worth even less.
Think about currency depreciation as a sort of tax, since it reduces your spending power. Before Japan boosted a key consumption tax in April people went shopping and retail sales briefly surged. But it didn’t last, and sales soon fell back to earth.
Russian retail spending also fell after a brief bump during Russia’s last major currency crisis in the summer of 1998, too.
In other words, any burst of Russian consumer spending will likely be temporary.