OREANDA-NEWS. Rising CPI in the last four months in Russia has not negatively affected real disposable income, which gained 11.7% in 9M07 on a rather fast increase in social transfers in September of almost 8% growth in nominal wages. Therefore, spending accelerated further, but the aforementioned increases also pushed incomes upward, keeping the pace of growth not far behind spending with the gap financed by retail loans.

Of note is the almost 2x m-o-m increase in private savings in September, which brought their share of disposable income to 10.4%, which is still quite far below last year's 14%. Inflation is unlikely to stimulate private savings and real incomes could be eroded by rising CPI. Nonetheless, with the CPI set to decline 12.1% by YE2007, according to Alfa Capital researchers' forecast, expected real disposable income growth of more than 10% allows to maintain their forecast of a 10.8% increase in savings by the end of the year.