The debt funnel of private sector in the Russian economy

Subject. The article addresses the debt funnel of private sector in the Russian economy. Objectives. The purpose is to identify reasons for the formation of the private sector debt funnel in the Russian economy. Methods. The study employs general scientific and special economic and mathematical methods. Results. The study unveiled an active growth in the volume of loans provided to non-financial organizations and an increase in their issuance of debt securities. On the one hand, this enables to develop their activities, and on the other hand - contributes to the growth of the total volume of corporate debt. Households actively take housing, car, and consumer loans. The growth of lending to the non–financial sector and households and the rising debt increase their overall vulnerability to economic shocks, i.e. lower revenues and job losses, respectively. The observed expansion of money supply stimulates lending and consumption, but also contributes to an increase in inflation and a decrease in the purchasing power of the national currency. Conclusions. The identified reasons for the formation of the private sector debt funnel in the Russian economy will be informative in shaping fiscal policy, taking into account the situation of a possible liquidity crisis, as well as falling incomes of the non-financial sector and households.