daxioma logo

The debt burden in Russia is breaking all records

01 November 2019

The debt burden in Russia is breaking all records

The experts analyzed the market and came to the conclusion that the debt of citizens to financial organizations go beyond their limits. Starting in 2012, the debt ratio grew and reached its limit. Consumers continue to borrow significant amounts, however, growth in disposable income is not observed - it only increases the growth of the loan burden. Analysts are concerned.

 

Today, November 1, 2019, the Central Bank of Russia has provided evidence that the debt load of the population in all types of loan reached a performance of 10.6%. Analysts say that this is the highest figure since July 2012.

 

Roman Blinov (head of research Department “International financial center”) focuses on the fact that such indicators are not any good - “more than half of working Russians (almost 40 million people) already have loans, but the worst is yet to come, this is no debt crisis”.

 

Rising debt burden triggered a significant drop in the standard of living and low income levels. Most in the country are households in which spending far more income. Pancakes says - “the growth in credit volume will continue, in the face of declining funding costs in the country will have the same growth rate of number of borrowers and lenders, because of the population perceive these concessions from the CBR as a “window of opportunity” that will not allow the growth rate of credit load to decline and in 2020”.

 

Ivan kapustyasky (a leading analyst of the Forex Optimum) suggests that there are several reasons for the growth of the debt burden, one of them is the decline of profitability of citizens (for several years), which forced consumers to sustain consumption through loans. Further, kapustyasky said, “the situation has changed only in 2019. So for January – September, real disposable incomes grew 0.2% in annual terms, i.e. there is a positive dynamics”.

 

Recently the Central Bank imposed a limit on the level of credit load, which correlated the ratio of monthly loan payments to income of the client. Experts believe that this innovation will stop the growth of lending, but not much. The point is that falling interest rates may boost demand from 46% of the working citizens who have not previously had loans, which will lead to further growth of debts.