Russian households in debt at record levels – 20 Minutes

International sanctions against Russia are particularly felt in the country. Russian household debt reached an all-time high in the first quarter of this year, the Central Bank of Russia said in a report on Tuesday. Ukraine), the retail lending market has reached the highest level of household indebtedness at a macro level since the start of observations”, i.e. 10.6% of the population’s disposable income, compared to 10.2% at the same period in 2021, according to this report. The Central Bank notes that in the context of the deteriorating economic situation and a rise in the cost of credit last March, when it sharply increased its key rate, the issuance of new consumer credit has nevertheless decreased. key rate at 11% In March-April, the issuance of new consumer credit fell by 3.4%. On the other hand, the Bank does not note any significant deterioration in the quality of loans to individuals. “However, in March-April, a significant increase in the share of consumer loans for which the next payment was missed was recorded”, from 5.3 to 7.5%, “indicating a potential increase in non-performing loans in the future,” notes the Bank. In the wake of the first sanctions following the entry of Russian troops into Ukraine on February 24, the Central Bank had drastically increased its key rate from 10% to 20%, before begin a gradual decline. It is currently at 11%. The Russian population is likely to suffer seriously from the sanctions: inflation, at 17.8% annually in April, combined with a drop in income due to the layoffs which are beginning and an increased recourse to partial unemployment by factories in lack of foreign parts , will significantly reduce the purchasing power of Russians, especially since they have little savings.