In December 2023 – January 2024, the growth of Russians’ consumer activity slowed down, which was reflected in the decline in the growth rate of consumer prices. But markets for goods and services remain overheated. Alevtina Ovchinnikova, an expert at the Main Directorate of the Central Federal District of the Bank of Russia, told socialbites.ca.
Central Bank governor Elvira Nabiullina had previously explained that the overheating of the economy was a result of the growing imbalance between supply and demand.
“The decline in consumer activity was to some extent facilitated by the strengthening of citizens’ sense of savings. Due to increasing interest rates, credit demand of households and businesses decreased. However, inflation pressure is still high. “Consumer demand remains high and supports the transmission of rising costs, including those arising from the labor market, into prices,” commented the expert.
He announced that a record amount of housing was realized in Russia in 2023, the maximum amount for mortgage issuance was updated and preferential government programs became the locomotive of the market.
At the same time, there was an increase in economic activity in Russia last year and at the beginning of this year.
“For example, new pharmaceutical production facilities were opened in Central Russia within the scope of import substitution. In addition, growth in clothing production in the Central Federal District accelerated in the second half of last year. “The development of this sector is still stimulated by the need to meet the needs of the population due to the departure of foreign brands,” the expert explained.
He added that the increase in car prices in the Russian Federation, their repair and maintenance has stimulated the development of car sharing, the market of which has noticeably strengthened since March 2023. The increase in the number of winter programs and festivals held in Moscow also led to an increase in the flow of tourists and increased attendance at cafes and restaurants.
Last year’s “What Do the Trends Say?” of the Central Bank’s research and forecasting department. As stated in the bulletin, if it is not possible to increase imports, the Russian economy may enter the overheating phase. On December 29, 2023, Russian First Deputy Prime Minister Andrei Belousov announced two ways to combat overheating of the domestic economy: increasing production and restricting demand.
Belousov before named One of the main threats to the Russian economy.