Russia’s national debt reaches 16.7% of GDP

State borrowing grew by almost 10% in the first six months of the year

Russia’s state debt rose by almost 10% in the first half of the year, as the government needed the funds to support the economy, Izvestia newspaper wrote on Friday, citing Russia’s Accounts Chamber’s report on budget implementation.

Government borrowing between January and June soared by 9.8% and is projected to reach 25.1 trillion rubles ($256 billion) by the end of the year, accounting for 16.7% of Russia’s gross domestic product (GDP).

The domestic debt increased by $14 billion (+7.4%) in the first six months and has now reached $206 billion, closely approaching the upper limit of $211 billion set by the Finance Ministry for this year.

At the same time, the share of internal borrowing in the total debt structure decreased from 82.3% to 80.5%, the report noted. The amount of domestic debt in securities as of July had risen by $14 billion since the beginning of the year and now amounts to $198.9 billion.

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Meanwhile, Russia’s external debt dropped by $1.2 billion and totaled $56.2 billion out of the upper limit of $66.6 billion, data showed. This comes as Russia reduced the volume of borrowing under government guarantees in US dollars by $1.1 billion to $18.5 billion. 

The government has been forced to borrow more funds internally as the country’s ability to borrow abroad has been reduced due to Ukraine-related Western sanctions. This saw domestic debt rise sharply in 2022, up to $194 billion, while the country’s external debt dropped to around $41 billion. 

According to the law on the federal budget for 2023-25, the volume of Russian state debt will increase to around $259 billion by the end of 2023, $282.6 billion in 2024, and $305 billion by the end of 2025. As a result, in the three-year period, the government plans to keep the volume of Russia’s state debt below 20% of GDP.

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