Russians cannot get out of debt?

The Russians scored a record number of loans in 2018. The average debt burden of Russian families increased from 22% to 27%. 

Russian people's current total debt is 14.86 trillion rubles.

According to the All-Russian Popular Front, last year, the country's most credited regions were Kalmykia, Tuva, Chuvashia, Irkutsk region and Yugra.

Most of the delays were made by residents of Ingushetia, Karachay-Cherkessia, Buryatia, North Ossetia and Adygea, the Izvestia newspaper reported.

According to experts, the debts of Russians to banks will continue to grow in 2019 by 10-12%. 

About half of the debts of citizens to banks today account for mortgage loans. 

The advisor on macroeconomics to the CEO of the 'Opening-Broker' brokerage house, economist Sergey Hestanov, speaking to Vestnik Kavkaza, explained that most likely that the reason for the trend is quite simple. "The relatively low interest rates, which have started to increase only recently, were low last year, which contributed to the fact that many decided to take advantage of lending," he said.

According to the expert, in conditions when real disposable incomes of Russians have been falling for the fifth year in a row, this is a matter of concern for many experts. "There are two reasons: on the one hand, there are fears that many will not cope with the loan debt burden, and on the other, if there are a lot of problem loans, it will threaten the banking system. Most likely, this year we will see the Russian Central Bank's attempts to cool off all lending segments, including the mortgage lending," Sergey Khestanov concluded.

Professor of the RANEPA faculty of Finance, Money Circulation and Credit, Yuri Yudenkov, speaking to Vestnik Kavkaza, noted that loans granted to the people are mortgage-backed, so Russia is safe from an economic crisis like in the U.S. in 2008, which occurred due to non-payment of mortgage loans.

According to the expert, credit growth is a normal trend for the economic model chosen by Russia. "Our development is at the expense of credit money, unfortunately, and we have to admit it. Once we have adopted this model of the economy, we are developing within it. Therefore, we don’t need to panic. Let's look at the U.S., where the national debt is much higher than GDP. External Russia's debt is now less than GDP, so the state economy is generally stable," he stressed.

"The fact that the debt owned by citizens is growing is an internal matter of the state, I think we will deal with it. It will become a problem when the non-repayment of loans exceeds 10% of the amount taken. Now the non-return is around 5% of the amount taken. This is bad, but within acceptable limits," the professor of the RANEPA faculty of Finance, Money Circulation and Credit noted.