Page 14 - RusRPTAug24

“Overheating is linked to the unexpected restructuring of the economy: many companies left, many imports have stopped, many supply chains were destroyed,” said Alexei Kiselev, a researcher at the Florence School of Banking and Finance and a former employee of Sberbank’s Center for Macroeconomic Research. “Reduced competition in Russia has led to increased labor productivity, but this is not the kind of growth coming from technological progress or innovation in the delivery of goods or services.”
Another measure that can be used to gauge whether an economy is overheating is an assessment of the business climate. The higher this indicator, the more businesses are anticipating higher demand and productivity. In the second quarter of this year, the Central Bank’s assessment of the business climate hit a five-year high.
Nevertheless, there is no overheating of the credit market in Russia (at least not yet). “When it comes to lending, overheating usually entails excess risks where someone has gone overboard with their debt,” the chief economist of a Russian bank told The Bell. “The issuing of credit has not slowed down as much as the regulator would like, but the problem here is not with the credit itself.”
14 RUSSIA Country Report August 2024 www.intellinews.com