ST. PETERSBURG, 4 July – PRIME. The Bank of Russia sees risks in the growing household debt of part of the Russian population, and not in new borrowers, said Bank of Russia Governor Elvira Nabiullina.
“In Russia lending as a whole and consumer lending specifically is growing as loan penetration. A fairly low percentage of people take out loans, and this will continue,” she said at a press conference at the International Finance Congress.
Ms. Nabiullina said that there is no danger that Russia is heading for a consumer lending bubble, and the job of the Bank of Russia is to prevent such bubbles from emerging in the future. She explained that the percentage of consumer loan payment transactions in the Russian economy is still small. “Given that, we now see risks in the household debt of only part of the population, as opposed to all Russians,” said the Governor of the Bank of Russia.
“Last year, consumer lending grew mainly from new borrowers. In quarter 1 of this year, we saw that banks started to give out more loans to people who already have household debt, and this is worrying,” explained Ms. Nabiullina. She said that any further increase in these risks should be avoided.
The Ministry of Finance and Ministry of Economic Development have repeatedly expressed their concern about the high household debt of Russians. Deputy Finance Minister Alexey Moiseev said this week that the level of household debt of Russians is exceeding a critical level and becoming a social problem. In early June, the Minister of Economic Development Maxim Oreshkin said that the imbalance in the consumer lending segment carries risks for the economy, and if nothing is done, the country may enter recession by 2021.