Kazakh retail sales increased for the fourth straight month in August and at their fastest annual pace in nearly two years giving hopes household consumption is starting to recover to support the slowing economy.

Retail sales increased by 4.1% y/y in August, sharply accelerating from a 0.1% hike in July, data from the State Statistics Committee showed. The growth in August was the strongest since January 2015.

Retail sales resumed growth in May snapping a seven-month declining trend. Household consumption suffered from a sharp depreciation of the tenge in the second half of 2015, which saw prices of imported goods jumping. Moreover, the living standards of ordinary Kazakhs declined as a result of the slowing economic growth.

The commodity-dependent economy is experiencing one of its toughest years in over a decade as a result of low oil prices, slowing demand from China and the ongoing recession in Russia. GDP growth eased sharply to 1.2% last year from 4.3% in 2014. Growth is expected to further ease to between 0% and 1% in 2016.

Retail sales will likely continue rising in the coming months supported by a low base from the previous year. At the same time, the volatile currency exchange rate will add fuel to the general perception of economic instability in the country, prompting a cautious approach to spending and, thus, negatively impacting retail trade.

On a monthly basis, retail sales rose 5.7% to KZT709.2bn (€1.87bn) in August. Across the first eight months of 2016 retail trade totalled KZT4.75tn, unchanged from a year ago.

Non-foodstuffs accounted for 64% of the overall retail trade. Trade in non-foodstuffs dropped by 3.2% y/y, while trade in foodstuffs went up by 7.6% y/y. The supply of stocks in retail trade amounted to KZT377.8bn as of September 1, enough for 55 days.

Retail sales increased the most in Almaty, where growth reached 28.9% y/y in the eight-month period. Astana followed with growth of 11.4%, ahead of the Karaganda Region at 9.2%.