By Andrey Ostroukh
MOSCOW--Russian retail sales grew at a slower pace in October, an indication that the economy is continuing to lose steam.
Figures released by the Federal Statistics Service Tuesday showed that retail sales grew 3.8% in October compared to a year ago, down from 4.4% in September. A slowdown in retail sales indicates that consumer demand, dubbed by Russian authorities as "a locomotive for economic growth", is weakening.
"The data speak for an economic slowdown...indicated by declining consumer demand," said Alexander Morozov, chief economist at HSBC in Moscow.
Russia's gross domestic product was 2.9% higher in the third quarter than in the same period of 2011, its weakest expansion in over two years.
To be sure, capital investments rose by 4.9% on the year after declining 1.3% in September. That was a surprise after Russia's industrial sector slowed down in October, and economists doubt it was more than a one-off development.
"A rise in investments was...surprising but I don't think that this is a steady trend and I don't expect more positive surprises," said Yulia Tsepliaeva, chief economist at BNP Paribas in Moscow.
Capital investments were driven by housing completions that were in turn fueled by mortgage lending growth.
Write to Andrey Ostroukh at [email protected]