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RUB1.05 trillion annually in 2017-19, up from RUB500bn in 2016 (which itself was increased from RUB300bn set at the start of the year). In the modern history of Russia, 2013 was the ‘record’ in terms of borrowings on
the domestic market: RUB 821.7bn, or about 92% of the total plan for that year.
MinFin sees these volumes as close to the market’s maximum absorption capacity . If the programme is executed in full, the local sovereign bond stock 1 would increase from its current 7.4% off GDP to 9.5% in 2019, according to MinFin’s estimates. Thus, the market’s annual expansion is seen below the economy’s average annual growth rate (1.5%) in that period. The market’s absolute size would increase 53%, while between 2013 and 2016 it expanded 39%. Interest rate costs are to increase as well, but are likely to remain below 1% GDP. Overall, debt channels (primarily domestic) are to become the key source for covering the fiscal deficit: by 2019, this would account for 91% of the total funding base, according to MinFin’s estimates, vs. 20% in 2016.
54 RUSSIA Country Report February 2017 www.intellinews.com
