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Russian regions will be provided with RUB100bn rubles ($1.4bn) in assistance allocated in order to compensate for the declining budget revenues, according to a decree signed by Prime Minister Mikhail Mishustin, TASS reported. “The funds allocated in line with the Russian president’s instructions will be provided to 56 federal subjects where tax and non-tax revenues as of May 1, 2020 were lower than those in the previous two years,” the government’s press service said. The payment for each federal region will depend on the volume of priority expenses of regional budgets. This measure will help balance consolidated budgets in federal subjects amid economic restrictions related to the coronavirus pandemic.
6.2 Debt
Russia - External debt 2012 2013 2014 2015 2016 2017 Jan-Jun ‘18
Budget: external debt (USD bn)
2,363.52 2,844.56 2,729.43 2,169.01 2,073.22 2,096.24 1,005.41
Budget: external debt (% GDP)
29.02 31.73 29.07 37.89 39.83 32.84 /
source: CEIC, CBR
The external debt of the Russian Federation as of April 1, 2020, according to the Bank of Russia, amounted to $450.0bn, decreasing from the beginning of the year by $40.8bn, or 8.3%. However, the entire debt is more than covered by the gross international reserves of c.$570bn.
A key role in the dynamics of the indicator was played by a negative revaluation due to the weakening of the Russian ruble. The influence of this factor was most noticeable on the reduction of the accumulated amount of debt on debt securities of the Government of the Russian Federation and the external liabilities of other sectors.
Russia has the potential to build up sovereign debt, said the head of the Central Bank Elvira Nabiullina during an online conference on May 8.
"We really have a fairly low debt, one of the lowest. Of course, we have the potential to increase sovereign debt in some way," she said. "A certain increase in public debt is possible, it is being discussed, but we must do it carefully. The Central Bank does not plan to participate in the direct redemption of the sovereign debt," she said.
At the same time, according to Nabiullina , a low level of sovereign debt is Russia's competitive advantage, which creates additional stability of the economy, regardless of the external situation.
Earlier, Finance Minister Anton Siluanov said that the Finance Ministry plans to increase the volume of public debt by 1.5-2% of GDP in 2020 to compensate for shortfalls in non-oil and gas revenues, as a result of which the amount of funds raised from the market can reach RUB4-4.5 trillion.
71 RUSSIA Country Report June 2020 www.intellinews.com
