Consumer credit growth gathers pace in July pointing to a rebound in consumer demand

RUSSIA ECONOMICS - In Brief 30 Aug 2022 by Alexander Kudrin

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CBR reported that in July, the Russian banks granted nearly R1.5 trln in consumer credits in gross terms which means that most likely the outstanding consumer credit grew last month more than in June. In June, outstanding consumer debt to banks grew by a mere R0.1 trln as was reported in the Survey of credit organizations published by the CBR a month ago. The fresh survey with more detailed statists for July is yet to be published. It can be estimated though that in July the consumer credit could have grown by around R0.3 trln, meaning an increase of around 1.1% m-o-m. In June it increased by less than 0.4% m-o-m. In the previous several months, outstanding consumer credit contracted amid increased interest rates and general uncertainty that covered the Russian economy after February 24. In recent months, however, the CBR has cut the key rate several times as markets generally stabilized and the economy demonstrated some resilience to shocks imputed by Western sanctions. Accelerated credit growth in July can be considered as an early indicator that last month, consumer demand started to recover. Rosstat will publish tomorrow its usual bunch of monthly statistics for July, and we’ll have more clarity about what happened last month with retail sales and other indicators. Evgeny Gavrilenkov Alexander Kudrin