EM retail sales growth picked up for a third consecutive month in May and is now running at a 12-month high. What’s more, the improvement has been widespread across different EM regions. In Russia and Brazil, a drop in inflation has both helped to boost real incomes and allowed central banks to loosen policy, thus easing some of the pressures on household purchasing power. In China, consumers have so far been resilient to policy tightening. And in Central and Eastern Europe, a tightening labour market has led to pick-up in wage growth, which in turn has given a boost to spending. Consumption won’t return to the rapid rates of growth seen earlier in the decade, but after a torrid couple of years there are at least signs that consumers are finally starting to find their feet.
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