Consumer Confidence Drops To 8-Year Low in 4th Quarter

Consumer confidence plunged to an eight-year low in the final quarter of 2008, data showed Friday, as the Health and Social Development Ministry said the number of people claiming jobless benefits rose 15 percent in December.

Consumer sentiment has been dented by a depreciation of the ruble, which has lost more than one-fifth of its value versus a euro-dollar basket since August.

The State Statistics Service said its consumer confidence index fell to minus 20 in the final three months of last year, down sharply from +1 in the previous period. The balance is calculated by summing the percentage of people with a positive outlook and deducting the negative ones. The service also reported a sharp decrease in expectations for the economy in a year's time.

Wage arrears are on the rise, and some are predicting that unemployment could double over the course of 2009. Companies are also cutting salaries, sending staff on unpaid leave, stopping plants and reducing working weeks.

The number of people claiming unemployment benefits rose to 1.5 million by the end of December, from 1.3 million a month earlier, Health and Social Development Minister Tatyana Golikova said Friday, Interfax reported.

The total number of unemployed is much higher, standing at 5 million in November, according to latest official data.

One-third of Russians feel their personal financial situation worsened during the fourth quarter, the consumer confidence data showed. Going forward, around 40 percent say the think things will not change, while one quarter say they will get worse.