Page 108 - RusRPTJul24

trillion rubles (1.4%), noticeably lower than in April and closer to the monthly growth forecast.
Consumer Lending Growth Accelerates in Russia
The growth rate of consumer lending in Russia accelerated to 2.0% in May, up from 1.8% in April, according to preliminary data. Since the beginning of the year, consumer lending has increased by nearly 8%, which is 1.5 times higher than the same period last year.
Drivers of Consumer Lending Growth
The significant growth in consumer lending in recent months is attributed to rising household incomes, which have maintained high consumer activity. Part of the acceleration in May can be linked to seasonal vacation expenditures. Additionally, the large volume of issuances in the credit card segment suggests that consumers are increasingly using interest-free grace periods for current expenses instead of other types of consumer loans or spending their savings, which accrue interest.
Regulatory Measures
To cool down consumer lending and shift issuances towards less risky borrower categories, the Central Bank of Russia will increase macro add-ons for loans with a total cost of credit (TCC) between 25% and 40% from July 1, 2024. Additionally, more stringent macroprudential limits (MPL) will be established for the third quarter of 2024.
The acceleration in consumer lending reflects the buoyant economic environment and increased consumer confidence. However, the Central Bank's measures indicate a cautious approach to managing potential risks in the consumer credit market.
Rouble Loans and Sectoral Investment
Excluding the mentioned bridge loan, rouble loans increased by 0.9 trillion rubles. Approximately a quarter of this increase was attributed to developers under project financing for housing construction. The remaining growth was evenly distributed across companies from various sectors.
Despite tight monetary conditions, companies continue to invest actively, driven by substantial government orders and high profits across most sectors. This financial robustness makes companies less sensitive to rising interest rates, allowing them to service their loans effectively.
Foreign Currency Loans
The growth of foreign currency loans slowed somewhat, rising by 181 billion rubles (1.4%) in ruble equivalent terms, following a 2.5% increase in April.
108 RUSSIA Country Report July 2024 www.intellinews.com