Where are Russians spending their growing income?

EMERGING EUROPE

Liesbeth Rubinstein, manager of the Invesco Perpetual Emerging European fund, looks at the best ways for investors to tap into spending patterns of the growing middle class.

Irina Leschova is a 28-year-old Muscovite who works in a media company. She is educated, reasonably well paid and has just returned from a four-day shopping trip to New York. While many consumers in the West are feeling the pinch as government-induced austerity measures impact, it appears that Ms Leschova and her peers in Russia have no intention of reining back their spending plans. It is easy to understand why. Unemployment in Russia remains steady at just over 5% (November 2012) and real wages have been rising at 10% each year. With disposable incomes rising, the spending habits...