MOSCOW, March 8 – RIA Novosti, Natalia Dembinskaya. Foreign public debt has been reduced. The sanctions have made it significantly harder to attract funds internationally, but the domestic market is helping. An optimal level of debt burden provides stability to the financial system and minimizes economic risks.
To close the gap
In 2019, Russia owed foreign investors 3.395 trillion rubles, in 2020 – 4,189, in 2021 – 4,435. Now – 4,039. Plus domestic debt – 18,781 trillion.
According to the Court of Accounts, the total amount rose to 22.82 trillion (up from 20.9 a year ago). However, the indicator for GDP fell by one point to 17.1%.
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The Ministry of Finance plans to continue to increase borrowing: by 2025 – up to 29.9 trillion rubles. It is necessary to close the budget deficit that has arisen due to the unprecedented sanctions of the West.
Minus 2.9 trillion rubles, or two percent of GDP, is expected this year. In 2024 – 2.2 trillion (1.4%), in 2025 – 1.3 (0.7%). Note that less than 3.5% is considered the norm.
The difference between revenues and expenditures is also eliminated at the expense of the National Welfare Fund (NWF). They took a trillion from there in 2022. As Prime Minister Mikhail Mishustin explained, increasing debt within reasonable limits will help protect “main pocket” funds.
“Negative projections about the budget seem very exaggerated. Yes, oil and gas revenues will fall, but exports of products from the grain and processing industries are steadily increasing. The pace is low, 1.0-2.5 percent, but stable,” says the Finance University of Management and Innovation under the Russian Government. Mikhail Khachaturyan, Associate Professor in his department.
there is a place to be
The government mainly relies on the domestic market: international financing is difficult. In addition, restrictions are placed on the assets of hostile non-residents, they cannot invest in Russian bonds.
Enough of the creditors. First of all, these are state-owned banks and the largest financial and industrial groups, says Dmitry Mazanov, a representative of Trader Income.
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“In the fourth quarter, the Ministry of Finance placed OFZs on 3.14 trillion rubles. This was ensured, among other things, by securities with variable coupons actively purchased by state banks. At the beginning of 2023, the Department reduced the volume of fundraising, and fixed-coupon classical It uses OFZs,” says KSP Capital analyst Mikhail Bespalov.
Foreign markets are not completely closed either. “For example, the Middle East, Southeast Asia, India and China exist. Yet in terms of potential secondary sanctions, domestic borrowing is safer because anything can be expected from former Western partners,” Khachaturian says.
Russia’s debt burden remains one of the lowest in the world at 15.6% of GDP and will not exceed 20% over the next three years. This is the best indicator among all countries in the G20.
The World Bank considers public debt of 77% of GDP problematic, but even with such a burden many advanced economies have lived for decades. So, in Japan – more than 200% of GDP, the USA – 140, the eurozone – 95, China – 71.
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The government can increase this parameter at least twice. However, it is not planned so far.
As Ruslan Spinka, Director of Sales and Customer Service at Fontvielle Investment Company, emphasizes, how the funds raised is spent is important. To support production, GDP will grow. Accordingly, with a public debt of 20-25% of GDP, the economy will remain stable.
In any case, domestic borrowing is preferred.
Eduard Khristianov, First Deputy Chairman of the Board of Directors of PJSC RosDorBank, said, “The service is easier to calculate, as it mainly depends on the key rate of the Central Bank. External debt carries risks associated with revaluation due to changes in the national currency.” .
There has already been a sad experience: in 1998 foreign borrowing prevailed (80%). The ruble collapsed and defaulted. Now that is out of the question.
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