Manturov: rising rates have a negative impact on investment activity in industry

The increase in the key rate of the Central Bank has a negative impact on investment activity in industry, said Deputy Prime Minister – Minister of Industry and Trade of Russia Denis Manturov.

“Increasing the rate does not motivate industrial enterprises to implement their investment plans. But at the same time, the range of support measures that the government has today, in particular the Ministry of Industry and Trade, makes it possible to compensate for the costs of research and design work,” he said on the sidelines of the Russia exhibition (quote according to Interfax).

The Deputy Prime Minister noted, answering a question about support measures in connection with the increase in the key rate, that the budget for 2024 has already been drawn up and it is correct to return to the issue of additional financing after the first half of next year.

On October 27, the Board of Directors of the Bank of Russia raised the key rate for the fourth time – by 2 percentage points to 15%. In its release, the Central Bank explained the need to tighten monetary policy by the fact that current inflation pressure has increased significantly and is exceeding the regulator’s expectations.

After the rate increase, banks increased rates on market-based mortgage programs. VTB from November raised rates by 2.4 percentage points, the minimum rate taking into account all discounts is from 16.4%. the 3rd of November Sberbank raised the minimum rate for basic mortgage programs by 1.4 percentage points to 15.6% per annum.

The Central Bank also updated its forecast for annual inflation. Now the regulator expects inflation in the range of 7-7.5% (last year it was 6-7%) for this year. In 2024 it will drop to 4–4.5% and will remain close to 4% in the future. Weekly inflation in Russia from October 17 to October 23 accelerated to 0.24% from 0.15%, in annual terms – to 6.59% from 6.38%, Rosstat and the Ministry of Energy reported.