The share of income Russian borrowers have to spend on repaying debts hit a record high at the start of 2021, according to Central Bank data.
“The average debt burden, the proportion of average monthly income needed to cover both the interest and principal of loans, climbed to 11.7 percent”, said Elizaveta Danilova, head of the Central Bank’s financial stability department. That was up from under 11% before the coronavirus pandemic.
“The debt burden has grown over the last year, that’s not surprising. It’s largely due to the pandemic and the decrease in people’s incomes, especially in the second quarter of last year,” she added.
Russians’ disposable incomes fell by more than 8% in real terms during the second quarter of last year, as the country went into a six-week nationwide lockdown at the start of the coronavirus outbreak. Unemployment shot up and many workers reported being asked to take pay cuts or reduce their hours. Earnings recovered toward the end of the year as the economy picked up steam again, although real disposable incomes were still down 3.5% for the year.
