BOFIT Viikkokatsaus / BOFIT Weekly 2019/07

The Central Bank of Russia reports that the household credit stock increased during the past two years. Growth accelerated substantially last year, lifting the total household credit stock to 14.9 trillion rubles (220 billion dollars) at the end of 2018 – an increase of 22 % y-o-y.  During Russia’s last credit boom in 2011—2013, annual growth in credit exceeded 30 %.

While the volume of housing loans grew especially fast last year, growth in unsecured consumer credit was also brisk. Credit stock growth was highest in the Moscow region, St. Petersburg and some regions in the Volga Federal District. In all these places, high growth was generated mainly by housing loans. Due to the housing loan growth in recent years, housing loans now constitute 43 % of all household borrowing. Less than 1 % of household credit is denominated in foreign currencies. 

The increase in credit demand partly reflects a slight drop in interest rates. The average rate on a ruble-denominated household loan for more than one year was 12.5 % in December. In December 2017, the similar average rate was 13.5 %. The corporate credit stock also grew rapidly, but the rate of growth (11 % y-o-y) was well below the growth in household borrowing.