Russians believe that now is the worst time since 2009 to borrow money, a study by the Moscow-based pollster VCIOM has found. VCIOM’s credit confidence index hit an all-time low score of 17 in April, less than half of the index’s high score of 40 in April 2014.
The credit confidence index – which is based on the question “Do you think that now is a good time to take out loans, or not?” – measures Russians’ willingness to borrow, on a scale from 10 to 90, with a higher score indicating a more favourable attitude toward borrowing.
Despite the decrease in Russians’ willingness to borrow, VCIOM’s consumer confidence index – which measures respondents’ willingness to make “major purchases” – grew from 31 in March to 32 in April, marking the second consecutive month-on-month increase.
The small uptick in willingness to spend and simultaneous hesitance to borrow suggests that Russians are cautious about the long-term prospects of the economy, despite the bottom of the recession having seemingly been reached.
Easing inflation and a significant slowdown in real wage decreases will have left many in Russia with more disposable income than in 2015, but following 18 months of serious financial hardship, the majority are clearly biding their time before making any long-term financial commitments, such as taking out loans.
Financial prudence appears to be the name of the game for respondents in the poll, with 66% thinking that now is a time to save, compared with the 24% who believe that they should be spending fast or investing their savings. But the split between those who believe they should be depositing savings and those who favour withdrawing savings to hold them in cash is slim, at 37% and 39%, respectively.