The Russian economy faces a new crisis. What challenges is it dealing with this time?

The Russian economy is increasingly affected by the war that the RF is waging against Ukraine. Residential construction in the country has plummeted by nearly 20%.

This is evidenced by data from Rosstat, as reported by "Interfax". The Russian construction market is suffering from the cancellation of preferential mortgage programs and the increase in the Central Bank's rate to a two-decade high.

By the end of December 2024, housing construction volumes in Russia fell by 19% year-on-year — down to 13.9 million square meters. Compared to November (-10%), the pace of decline accelerated nearly twofold, and when compared to October (-0.6%), it increased more than 30 times.

Overall, for the year, housing construction volumes in the RF decreased by 2.4%. However, this low result is primarily due to the first half of the year. In January to June, the volume of housing put into operation in the RF increased by 2.4%, with growth in June and July reaching 8% or more.

However, after the preferential mortgage program for new constructions with an 8% rate, launched in 2020, was discontinued in July, the situation changed drastically. The construction market collapsed.

By the end of the year, mortgage rates in Russia rose to levels unseen since the early 2000s. As a result, mortgage issuance fell by 40%, and in December, the decline reached 73%. In the first weeks of January, the drop intensified, reaching 78-80%. This led to a sharp decrease in sales for developers.

Earlier, "Telegraph" reported on another issue facing the Russian economy. The RF industry is threatened by mass bankruptcies of factories. More than 20% of manufacturing enterprises have a profit-to-interest payment ratio at a risky level, making them unable to repay their loan debts.