5 Jul 2022 17:42

Weak demand remains main risk to Russian economy's recovery as confirmed by deflationary trend - minister

MOSCOW. July 5 (Interfax) - The main risk to the recovery of the Russian economy remains weak demand, which is pointed to by a deflationary trend, Russian Economic Development Minister Maxim Reshetnikov said at a meeting of the presidium of the government commission to improve the economy under sanctions.

"The main risk to the economy's recovery remains, and it's weakness of demand. This is also confirmed by a deflationary trend in the economy and a slowdown in lending," Reshetnikov said.

"Individuals' loan portfolios aren't growing, and the main growth for companies is due to preferential lending programs. Deposits are growing at the same time, as in conditions of high effective rates, companies and the public are not keen to spend money. They prefer to save it," he said.

"There is also the structural transformation of the economy going on amid these processes. We have problems in industry, although, of course, the situation by sector is uneven. The figures for May show that the dynamics range from a drop of 66% in automobile manufacturing and 11% in wood processing to growth of 29% in pharmaceuticals and 36% in electronics. But I'll emphasize again that the main limit right now is weakness of demand, and therefore within the framework of the plan, we're focusing primarily on additional lending in the economy, on creating demand," Reshetnikov said.