Page 9 - RusRPTDec19

No growth from the national projects in next five years
A new study by Evghenia Sleptsova of Oxford Economics finds that the national projects will boost GDP growth by a negligible 0.1-0.2 percentage points over the next five years.
The projects are currently experiencing significant funding delays. In early October, just 55.7% of funds allocated for 2019 had been spent. Yet even if the government manages to spend 100% of allocated funds, the impact of the national projects will be neutralized by the negative effect of January’s 2-percentage-point value-added tax hike. Perversely, the government raised VAT to fund the projects, collecting more than 600 billion rubles from the tax hike per year. In the end, this won’t bring much good, Sleptsova writes, as the revenue collection measure has slowed the economy.
2.3 ​ ​Does Russia have a consumer debt bubble?
The total debt burden on the population (the ratio of debt payments to disposable income) as of October 1 was 10.6%,​ said Elizaveta Danilova, director of the financial stability department of the Central Bank, at the conference “Lending 2020. Challenges and New Opportunities ”(quote from Interfax). This is the highest figure since at least July 2012, follows from its presentation (there are no earlier data in it).
More than half of Russia's employed population has loans (54%, 39.5 million people), the presentation said. The load on mortgage loans - 10% of employees have them - remained at the level of 1.7%, while on the other hand it grew to 8.9% from 8.7% on July 1.
The quality of consumer loans is still good. “In contrast to the episode of 2013–2014, when the portfolio deteriorated rather quickly, we now see that the quality remains pretty good - apparently this is due to the fact that banks after the crisis have long kept the standards [of borrower selection] high,” - said Danilova.
In addition, the composition of borrowers is constantly updated, emphasizes Danilova. Of those who have a cash loan - as of September 1, there were 26.5 million people - 54% did not have loans at the beginning of 2015, 45% - at the beginning of 2017. Most borrowers have only one cash loan or mortgage, emphasized Danilova, however, the number of those who use several types of loans at once is growing.
Banks Analysts, bankers and officials do not share this optimism The regulator sees other “disturbing trends” - the share of loans to people with high debt burden is growing, Danilova said in September. There are more bad debts, the payment of which is overdue for more than a month: over the year, their share increased from 1.5 to 1.8% (as of February 2019), according to the Central Bank. The risks of loans to citizens may increase, since real incomes of the population do not grow, Danilova said. The Central Bank, she said, "is also worried about a potential over-active transition to a consumer model." Real disposable incomes of the population (minus obligatory payments) for January - September grew by only 0.2% compared to the same period last year, Rosstat reports. In I and II quarters they decreased. For nine months, the savings of the population amounted to 666.8 billion rubles. - 10.9% less than in January - September 2018 The debt burden is growing for all borrowers, but especially for the poorest, notes the National Bureau of Credit Histories. People with incomes up to 20,000 rubles. it amounted to 28.8% (an increase of 1.8 percentage points), for citizens with average incomes (up to 40,000 rubles) - 24.6% (+1.7). Not much easier for those whose incomes are higher: they spend 20.6% of their income on debt service. The most difficult to service loans to poor residents of the Amur region (34.4% of income), Mordovia (33.4%) and Orenburg region (32.8%). And the burden on residents of the
9​ RUSSIA Country Report​ December 2019 ​ ​www.intellinews.com