And don't ask for more: the government restricts the growth of lending in the public sector

The government restricts the growth of lending in the public sector so that it does not outpace private investment, said Maxim Reshetnikov, head of the Ministry of Economic Development, speakingat a meeting of the Committee on Economic Policy in the State Duma. According to him, the government and the Central Bank are looking for a balance between containing inflation and economic growth. Izvestia investigated when these restrictions can be relaxed and how they affect the execution of state projects.

Expected step

This is generally an expected step, since in recent years monetary and fiscal policy have been in a clear antiphase, when the restraining measures of the former were offset by the stimulating measures of the latter, causing a crowding-out effect, Andrei Chelyuskin, Candidate of Economics, associate Professor at the ION Presidential Academy, told Izvestia.

— The explanation is simple — potential contractors for government contracts initially include increased interest costs in its price. Accordingly, in an environment where government orders were growing rapidly, the demand for loans was also increasing, regardless of their prices, with all the ensuing consequences in terms of rising prices. Therefore, the issue of more active management of these processes has been overdue for a long time," he explained.

The Central Bank, according to him, has already made the first transparent hint at easing the PREP. Therefore, it is logical that the fiscal authorities should have taken counter steps. Accordingly, restrictions will be eased when the DKP and fiscal policy converge at a neutral point, when individual measures will not upset the balance, apparently near the target inflation rate of 4-5%. It is unlikely to be achieved this year.

— Now it is the priorities of economic stability that are coming to the fore, so there is a possibility that some of the state projects will really slow down, contrary to the wishes of the state customers responsible for them, — says Andrey Chelyuskin. — But it will happen point-by-point, in manual control mode. And private contractors can take the place of the public sector in projects, which in the current, generally difficult conditions can support individual enterprises, but from the point of view of macroeconomics it will be neutral — replacing one contractor with another will not change the essence of the process.

Balanced spending

At the moment, the level of interest rates is the main constraint for lending to state—owned companies on market conditions - the Central Bank is playing the "first fiddle" here, Anton Tabakh, chief economist at the Expert RA rating agency, told Izvestia. Moreover, the Ministry of Energy has the ability to regulate access to concessional lending programs and develop government directives to state-owned companies, including on financial strategy. And here the actions look balanced.

— In general, the restriction of market lending, all other things being equal, reduces the pace of implementation of government projects. However, the main sources of investment are the budget and the companies' own funds. Therefore, the effect does not seem significant," the expert believes.

The easing of restrictions directly depends on the indicators of GDP, inflation and the Central Bank rate, Vladimir Prokhorov, a member of the General Council of Delovaya Rossiya, told Izvestia. Thus, if the economy shows stable growth, then the credit sector will begin to relax. Current trends on the world stage show a number of destabilizing and difficult-to-predict factors.

— If there is a change in the political course of foreign countries due to personnel changes in the Oval Office, then an influx of foreign investment will occur in our market, which will also open up a faster path of relaxation. The current state of affairs does not significantly limit the execution of state projects. On the contrary, it allows the Russian investor not to die, to contribute to the country's economy and create a natural cash flow," he said.

Before talking about when restrictions will be relaxed, it is necessary to look at when they will work, Igor Rastorguev, a leading analyst at AMarkets, noted in an interview with Izvestia.

— For the first time, the upcoming restrictions became known at the end of August last year, shortly before the decision was made to set an unprecedentedly high 21% key rate of the Central Bank of the Russian Federation. Then information leaked to the press that the government and the Bank of Russia were preparing a joint plan of additional actions to combat inflation, which, in particular, included measures to cool demand for new loans from state-owned and state-owned companies. It was reported that banks are too actively lending to state—owned companies, hoping that their stability is guaranteed by the state," he recalled.After that, the key rate was increased. It remains at the level of 21% so far, which has made it difficult for private companies to obtain credit funds in the first place. No substantive data on the decline in public sector lending has been received, Igor Rastorguev stressed.

— [Russian Prime Minister Mikhail Mishustin] at the end of last year announced the launch of 20 new national projects in 2025. By the end of 2030, it is planned to allocate more than 40 trillion rubles from the budget and attract 13 trillion from extra-budgetary sources. A significant part of these projects will be carried out with the direct participation of state—owned companies, so it is not in the interests of the state to slow down their implementation by restricting access to liquidity," the expert noted.

Restrictions on lending in the public sector will not affect the execution of government projects. One type of financing is often replaced by another, Vladimir Eremkin, senior researcher at the RANEPA IPEI Structural Research Laboratory, told Izvestia.

— Ultimately, we are talking only about limiting the growth of lending in the public sector, that is, borrowing volumes will grow in any case. The effect of such a measure in terms of ensuring macro stability and controlling inflation will be negligible, since lending is unlikely to be the main source of price growth today. The restrictions imposed can be relaxed at any time when it becomes clear that inflation has begun to slow steadily," the expert stressed.

Izvestia sent requests to the Central Bank and the Ministry of Energy, but at the time of publication, no responses had been received.