A Return to Russia? Health Check on the Russian Consumer

As speculation accelerates that President Trump will grant Russia some sanctions relief in the near to medium term, corporate actors are beginning to eye the possibility of re-entering the market — the 11th largest in the world by GDP. Before doing so, many are asking themselves how the Russian economy is really doing. With the departure of Western corporations, many of the providers of alternative data on Russian consumption and consumer health have also fled, and even the OECD has stopped publishing Russian consumer confidence data. 

Morning Consult has continued to survey Russian consumers regularly on a variety of topics that provide a window into their financial well-being, including consumer confidence, purchasing considerations, inflation expectations and employment status, with our historical data predating the invasion. Trends in this data suggest Russian consumers are like glass: Strong and very resistant to pressure, but fragile. And a few cracks are showing.

Russian consumer sentiment has been highly resilient

In order to gauge consumer sentiment in Russia and 40+ other markets, Morning Consult asks five questions relating to consumers’ personal finances and business conditions in the country as a whole, all on a daily basis. The results from those five questions are then aggregated into a country-specific Index of Consumer Sentiment (ICS). For more information on exact index construction and question wording, see our companion ICS methodology backgrounder. 

Per this index, Russian consumer confidence is now higher than it was before the invasion of Ukraine. It took an initial nosedive after the invasion as consumers feared the worst, but one much smaller than that associated with the COVID-19 pandemic, before quickly rebounding. Since then, it has moved from strength to strength, with only a slight blip around the highly unpopular partial mobilization in mid-2023. 

The Russian economy is dependent on oil. Delayed implementation and enforcement of energy sanctions — driven by a reluctance in Washington and Brussels to restrict Russian exports too much and thus spike global oil and gas prices, in turn angering voters at home — allowed Russia time to construct a complex sanctions evasion machine. Russia’s continued ability to export oil on global markets, including roughly 3.6 million barrels a day to India and China (1.6 of which go to India), has allowed it to build a wartime economy bolstered by military spending. 

But consumer confidence hangs on the distant future more than present conditions

The components of our Russia ICS present a more nuanced picture. Specifically, before the invasion, 5-year business expectations used to be roughly in line with consumers’ views of current buying conditions. But afterwards, these long-term business expectations shot up and have remained consistently above measures of current conditions or shorter term expectations. In other words, in the past Russian consumers expected to be about as good five years out as they are now. But today, Russian consumer confidence is being buoyed by the belief that the distant future will be better than today. This is a very unusual pattern in consumer confidence readings relative to other countries in our data set, and likely reflects Russia’s current political cohesion. More recently, however, all five component indicators have been trending down.

Perceptions of personal finances have been deteriorating over roughly the past year

The lowest of all Russia ICS components is current personal finances. Looking specifically at that metric, we see that from the invasion up until mid-2024, consumers increasingly thought their finances looked about the same as a year ago. But over the past 13 months, Russians’ perceptions of their current personal financial situation compared with one year prior have deteriorated somewhat. This is the first negative turn in this metric since before the start of the war and the imposition of sanctions, with the exception of a negative blip we noted during Prigozhin's march on Moscow. It may also indicate that consumers’ savings are not the buffer they once were. 

The labor market is showing softness, but no official rise in unemployment

Putin himself hinted at a possible explanation for the dip in Russians’ perceptions of their personal financial well-being in a recent press conference. He pointed to the rise in what he called “hidden unemployment,” or employees who are at risk of dismissal when their employers take them to part time or furlough them, especially in the industrial sector. 

In an attempt to validate his comment more specifically, we looked at a niche demographic of Russians employed in industrial occupations and asked them about full versus part-time work. We did not find any indication of recent changes. This could be because the sample size for this group (about 500 Russian adults per month) was too small to register the change yet. It could also be that Putin was trying to get ahead of news on growing unemployment which has yet to show up in the official data. Russia’s official unemployment rate has declined throughout the conflict, and has been hovering around a very low 2.2% for quite some time. 

To perform this assessment, we looked at Russia’s official unemployment rate from the Federal State Statistics Service alongside Morning Consult’s measure of unemployment, which applies the Bureau of Labor Statistics’ (BLS) methodology in a more streamlined format consistently across 43 countries, and indexed them both to the average unemployment rate across 2021 (prior to the Ukraine war). The two measures vary somewhat in how they are measured (though both are ILO compliant), but offer a way to see if the trends in the two datasets mirror one another in spite of differences in their construction. 

What we see is that the two measures tracked one another closely throughout 2022 and into 2023, and then diverged in early 2023 before once again tracking one another closely (In early 2023, Morning Consult updated its survey weight set for Russia, which may have contributed to the change). The two unemployment measures continued to trend together until late summer of 2024, around the same time we see consumers’ perceptions of their personal financial conditions begin their modest decline. Around this time, we also see the indexed unemployment rates start to diverge, with our measure of unemployment rising in July 2025 to sit well above the 2021 indexed level. 

Spending on non-essentials has fallen, but isn’t at dismal lows

The rise in unemployment, as well as the decline in consumers’ perceptions of their personal financial health, are not dramatic. And while self-reported spending has declined in some discretionary categories, it has not fallen off a cliff. Spending on durable goods like home appliances is likely currently held back by a high policy rate of 18% (also potentially delaying home starts and sales), while spending on vacations actually rose throughout much of 2023. 

The Russian household savings rate is very high, reaching levels above 30% in 2024, according to Russian statistics provided to the World Bank (By comparison, the U.S. savings rate is currently around 4%). This high savings rate smooths the impact of rising unemployment and/or inflation, especially in an environment where high interest rates benefit savers over borrowers. 

Inflation expectations and CPI have been declining with high interest rates

While Russian inflation has been high, its rate has been relatively stable, coming down slightly in recent months. An alternate measure of inflation expectations developed by researchers at the Federal Reserve Bank of Cleveland, Brandeis University and Morning Consult shows that expectations remain anchored, if elevated. 

Consumer-facing companies wanting to re-enter the market can proceed, but must be armed with data and caution

Generally speaking, our data indicates the Russian consumer is in shockingly good shape for having weathered over three years of war, shored up by Russia’s state-owned oil companies’ revenues which underpin the wartime economy. But while headline metrics like consumer confidence suggest robust demand, the underlying components reveal a more fragile foundation built on future expectations rather than present realities. The divergence in trends between official unemployment data and alternative measures, combined with declining personal finance perceptions and selective spending weakness, suggests the economic pressures are real, but consumers are cushioned by high savings rates, high government spending, high employment, and psychological optimism about the distant future. 

If the United States and/or Europe grant some sanctions relief on Moscow’s oil exports, Russian consumers will be in a better position, though the drivers of employment would take time to rebalance if wartime spending ends. For companies considering market re-entry, this means they will encounter consumers with some remaining purchasing power today, but they will be operating in an imbalanced economy with several cracks — making timing critical to success.