Analysts gave a gloomy forecast about the standard of living of Russians

Loans are relatively good when borrowers’ incomes are rising or at least stable. But the situation changes if wages do not rise or even fall. In recent years, the number of Russians who do not approve of cash loans has grown significantly. This was told by the experts of the Superjob service. Meanwhile, despite the danger of loans, people continue to borrow from banks. According to analysts’ forecasts, the debt hole (both for the state with its budget, and for the population with its family accounting) will only increase.

According to Superjob, more than 60% of Russians called loans “the way to the debt hole.” Over the past 15 years, the proportion of those who see borrowed money as a danger has almost doubled.

At the same time, the real disposable income of the population decreased by 3.4% in the 3rd quarter of 2022 compared to the same period last year, according to Rosstat. And this is in addition to a decrease of 0.8% in Q2 and 1.2% in Q1 2022. It is clear that people’s ability to service and repay loans has noticeably decreased. However, consumers have not stopped borrowing from banks.

In recent years, the level of debt of Russians is breaking records. On average, a family spends about 50% of their income monthly on servicing loans, and if citizens have more than one loan, this share reaches 80%. Such a situation threatens with a collapse of non-payments, which will affect the stability of the country’s financial system, says Fyodor Sidorov, a private investor and founder of the School of Practical Investing.

“It is hardly worth expecting that our citizens will be able to immediately pay off their existing debts and stop taking loans. It’s impossible. The Russians fulfill and will continue to fulfill their obligations to banks, although for many it becomes very difficult due to falling incomes, ”the expert continues.

Indicative is the amount of overdue debt and its change. For loans in the banking sector, it amounted, according to the latest data from the Central Bank of the Russian Federation, to 1.084 trillion rubles. as of December 1, 2022. As of October 1, it was 1.065 trillion rubles, and as of January 1, 2022, it was “only” 0.945 trillion rubles. Thus, for 11 months, the indicator increased by almost 15%. The reasons for this are understandable, given the extremely difficult year for the economy and the population, says Mark Goykhman, chief analyst at TeleTrade.

“The coming year is unlikely to improve the situation. The contraction of the economy will continue, the budget deficit will grow. Real incomes are likely to continue to decline, he believes. — At the same time, interest rates on loans tend to increase, since the Central Bank of the Russian Federation has stopped cutting the key rate. Accordingly, we can assume an increase in overdue debts.

It is clear that while the incomes of the population are growing, the volume of loans issued is also growing, but usually with a lag (it takes time for banks to evaluate borrowers and start issuing money to more people in large amounts), so debt load (the share of income spent on debt service) can even decline.

When incomes fall, the opposite is true: people have already taken out loans, they need to be closed or refinanced, and it has become more difficult to pay. As a result, the financial burden on households is growing. The share of income not going to cover loans is declining.

“With the economy shrinking, income growth is unlikely or even impossible. In official forecasts, the recession will last more than a year and will be replaced by several years of stagnation. In unofficial forecasts, the decline in living standards will not stop even by 2030, ”said Valery Yemelyanov, an expert at BCS World of Investments.

According to the interlocutor of MK, if you already have debts, then you need to focus on two points: reduce the cost of loans and pay off those that can be closed faster.

“It is usually beneficial to refinance all loans into one with a lower rate and, if necessary, an extended repayment period as well. All free funds remaining after covering basic expenses (housing, food, medicines, minimum household needs) should be sent for early repayment. Usually, closing small loans motivates you to close larger ones faster. Step by step, you can get rid of all expensive debts, except for those that are profitable to leave, for example, mortgages (if the rate is preferential or just low), ”summed up Yemelyanov.