The reason why citizens are buying goods right now has been named
According to the results of 2023, Russians have accumulated loans in the amount of 16.8 trillion rubles. The figure is, one might say, astronomical. It is more than 1.5 times higher than in 2022. As you know, not all of our fellow citizens can bear the burden of paying off their heavy debts. And they end up in debt bondage, left alone with collection agencies. They are nightmares day and night.
According to a reputable analytical company, a significant portion of loans issued in 2023 were mortgages – 47%. Its popularity even broke the record of 2021, which was previously considered the most successful for the mortgage market. And the share of cash loans increased by 57%. In December, an increase in the issuance of retail loans was registered in the amount of 1.43 trillion rubles — 20 billion more than in November.
In total, Russian banks issued 52 million loans last year.
Let’s find out what last year’s credit boom means and how it can affect the economy with financial analyst, Candidate of Economic Sciences Mikhail Belyaev.
“I can tell you why the Russians took out so many loans,” he says. “When they saw that rates were steadily rising and prices were rising, they decided to acquire basic necessities as early as possible. Because tomorrow they will be even more expensive. Let's say, get a mortgage now, before the rate skyrockets. And construction materials have not yet become more expensive.
The same can be said for other areas of the economy.
This, in my opinion, determined the lending activity of Russians. They began to take out loans en masse in order to purchase goods at least at current prices.
— First, about the borrowers. There are certain risks. People with relatively low incomes, undermined by inflation, will be unable to fulfill their loan obligations. Not all, of course, but some part.
According to the classics, it is generally believed that taking out a long-term loan in conditions of inflation is profitable. The terms of the loan are not revised, and salaries are indexed and increased annually. If payments are provided for several years, then the individual even gets savings.
But in our conditions, such a classic does not apply. Few employers in the country are engaged in wage indexation, and if they do, it is far from being done in full. The real level of income of people is reduced, which leads to a “bubble”, not repaying the debt to the bank.
— More theoretical. That is, debt restructuring, its extension and rate reduction. Banks are very reluctant to take such a step.
— On the one hand, the borrower is freed from debt and takes off this yoke. But on the other hand, the bailiffs release him from part of the property that belongs to him. And which is sold at auction in order to repay, at least partially, his credit obligations.
The option is also not very good.
— Formally it is considered that she is reviving as the population has money and consumer demand increases. Loans are not stored under the pillow; they are immediately purchased. Which is a signal to domestic producers to increase production volumes. More goods enter the market and prices decrease accordingly…
But this is ideal. In our conditions of a monopolistic system, an increase in consumer demand is most likely a signal not to the manufacturer, but to the monopolists. And they raise their prices for goods. Nobody controls their actions.
— I wouldn’t be surprised, because inflation has not gone away, and some officials are sure that it can only be fought by increasing the rate.