The Central Bank has lowered the forecast on growth of lending to the economy to zero


The Bank of Russia has lowered the forecast on growth of economy crediting by banks, said in a December report, the Central Bank “monetary policy”. The regulator expects that by the end of 2016 this figure will grow by only 0-3%. In September, the Central Bank predicted that the volumes of crediting of economy by banks will increase by 4-6%.

The Central Bank has lowered the forecast “given the recent months the dynamics of lending, a weaker than expected earlier,” the document says. The growth of credit activity keep maintaining low risk appetite of financial market participants because of the unstable economic dynamics, the report said. In addition, lending to the economy was hindered by the high debt burden in some industries of the real sector, says the Central Bank. As a result, “in the August—November the annual growth of banks’ loan portfolio slowed to close to zero levels,” the report said.

That credit activity in Russia remains weak, also spoke at the press conference following the meeting of the Board of Directors of the Central Bank on 16 December the head of the Bank of Russia Elvira Nabiullina. She noted that banks are now cautious in selecting borrowers and issue new loans under strict rules.

In November, the first Deputy Chairman of Bank of Russia Dmitry Tulin has stated that the development of Bank lending will not be able to solve the problem of lack of investment in the economy. According to him, Bank loans in Russia has never been a very important source of capital.

According to the Central Bank on 1 November, banks issued to legal entities and individual entrepreneurs of ruble loans by 24.75 trillion On the same date in 2015, the figure was of 24.05 trillion In the baseline forecast of the Bank of Russia, in 2016 the Russian economy will decline by 0.5–0.7 percentage points in 2017 — will grow by 0.5–1 PP. Speaking on 2 December in the state Duma, Nabiullina said that without changes in the structure of the economy the growth will be sporadic and will not affect all sectors of the economy.

The regulator expects that in 2017 under the baseline scenario, financing companies and the population will grow by 4-7%. In this risk scenario (when oil prices fall to $25 per barrel) suggests that next year this figure will increase by the same as this, 0-3%.

Source