Consumer Spending Nearing Т97 Levels

Consumers are spending at such a rapid clip that the State Statistics Committee retailersТ confidence index has finally reached pre-crisis levels, according to committee data.

Over the first eight months of this year, consumers spent 1.7 billion rubles ($61 million) on goods and services, up 30 percent from the same period last year, the committee said Thursday.

The number of people buying durable goods over the summer was more than the same pre-crisis period in 1998, it said.

And the proportion of wages spent on goods and services increased from 6 percent to 81 percent from June to August, it said.

"[This] is a very positive tendency," said Marina Sabelnikova, a deputy head at the statistics committee. "It means that after buying foodstuffs the consumer is able to allow him or herself a little something extra, a product for long-term use.

"This tendency was observed in 1997," she added. "[But] after the crisis the market share of food stuffs, which had just started to fall, increased sharply."

The figures suggest that retailers have fully recovered from the crisis and have good reason to feel optimistic about the future, Sabelnikova said.

Alexander Demidov, general director at the GFK marketing agency, said his data shows that demand fell about 40 percent after the August 1998 crisis and now stands at 90 percent to 95 percent of 1997 levels.

"There is a steady rise in demand," he said. "It has yet to reach 1997 levels, but it is growing across all indicators."

"There are positive changes Ч the data from our surveys also support this," said Marina Krasilnikova, head of the department for living standards at the All-Russia Center for Public Opinion.

Despite the good news, analysts arenТt overexcited: The rosy figures from the summer months have only been posted once before, in 1997. Overall, the economic picture over the past decade has been gloomy and experts fear the country will inevitably revert back to the doldrums.

While consumer confidence is growing, about half of them still consider their financial affairs to be in bad or very bad state, according to the All-Russia Center for Public Opinion.

"We should not exaggerate these changes," said Krasilnikova.

"Only a limited segment of the population is buying durable products."