Page 70 - Russia OUTLOOK 2024

In 2023 Russia earned some $20bn from grain exports and this sum is only likely to increase.
• 5.3 Construction & Real Estate
Russia’s construction sector has been held up by a boom in house sales driven by the state’s deliberate policy of subsidising mortgages. As one of the three biggest economic drivers, the Kremlin has ignored CBR protests and has prolonged the mortgage programme as a way of supporting economic growth and providing employment.
Russia's biggest bank Sberbank anticipates a sharp cooling of the mortgage market in 2024 following an expected 80% rise in mortgage lending in 2023, CEO German Gref said in December.
VTB, Russia's number two bank, expects mortgage loans across the entire sector to total RUB7.2 trillion ($22.2bn) in 2023, falling to between RUB5 and RUB5.5 trillion in 2024.
CBR Governor Elvia Nabiullina worries that this is creating the beginnings of a housing bubble that threatens Russia’s financial stability. The problem may correct itself as thanks to persistent inflation, the CBR has put through a series of four big rate hikes in 2023, bringing the prime rate up to 16% on December 15 that will cool the economy, and she has also tightened prudential rules on banks to curb the mortgage lending programme.
The mortgage issuance for new housing in Russia could decline by another 20%-40% in 2024 should the state mortgage support be additionally restricted, Kommersant daily reports.
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