Russian industries to get through 2025 without major shocks, despite high interest rates - Kostin

MOSCOW. April 24 (Interfax) - Sectors of the Russian economy should not experience major shocks in 2025 against the backdrop of high interest rates, although they will not feel very comfortable, VTB chief Andrei Kostin said.

"High interest rates are bad for everyone, bad for companies with a lot of debt, and our companies have a lot of debt. But we do not see any danger of mass bankruptcies or situations where emergency measures of some sort are needed, although I think quite a lot companies will need restructuring," Kostin said at a meeting with VTB Private Banking clients.

He said there were good prospects for debt restructuring in sectors like development and construction, coal and metals.

"I think the economy as a whole and other sectors might not be very comfortable if interest rates stay high long-term, of course. For now, I think we will get through this year without any particularly serious upheavals in our economy's sectors," he said.

He said that in the United States, high interest rates had at one time led to a radical restructuring of the economy, which turned from a manufacturing one into a financial and service one. "I don't think this is a risk for us, so we need to go back to the manufacturing sector, to our export industries. Of course, the key rate will be a very important issue," Kostin said.

VTB thinks the key rate will remain high for quite a while.

"We believe that there are grounds for it to start coming down somewhat by the end of the year, but gradually, say, to 19%," Kostin said. He said the Central Bank rate, if it continues to fall as planned in the coming years, should reach an acceptable single-figure level.

Kostin, like the rest of the market, expects the key rate to remain at 21% at this Friday's meeting.