Page 6 - RusRPTFeb22

A recovery in consumption can be seen from the banking sector statistics, which have also continued to show strength in retail lending growth.
According to the CBR, retail loans rose 23.2% y/y in December from 22.1% y/y in November, primarily driven by mortgage market growth. On the funding side, the performance of the retail deposit market was relatively solid with 5.7% y/y growth in December vs 6% in November. However, the net saving rate is still below the pre-pandemic level – hence, it justifies the CBR’s decision to raise the key rate further in order to cool down the lending market and curb inflation pressure.
Higher inflation and fading effects of subsidies pushed the real wages down in October amid deepened divide in the labour market. The worsened epidemiological situation brought fewer drags to the economic performance than expected.
The labour market constraints and persisting bottlenecks in the global supply chains might bring the economy to an overheated state and weaken the growth momentum. Analysts expect GDP growth to slow to 2.7% y/y in 2022.
Russia’s GDP will decelerate to 2.4% in 2022 and to 1.8% in 2023, the World Bank said in its Global Economic Prospects report. "Growth in the Russian Federation - the region’s largest economy - is projected to moderate to 2.4% in 2022, as macroeconomic policy continues to tighten and domestic demand wanes, and to further decelerate to 1.8% in 2023, as industrial commodity prices edge down," the World Bank’s experts said.
6 RUSSIA Country Report February 2022 www.intellinews.com