Despite record borrowing to shore up the country’s finances and fund its healthcare system during the Covid-19 pandemic, Russia has racked up far less national debt than first expected, a new economic analysis has claimed.
On Wednesday, local media reported that the Accounts Chamber in Moscow had recorded a rise in public liabilities of more than 5.4 trillion rubles ($73 billion) over the past year, putting its total bill with lenders at nearly 19 trillion rubles (more than a quarter of a trillion US dollars).
These calculations put the debt at 17.8 percent of the country’s GDP – still far short of the 19.1 percent set out in law and allowed as part of the federal budget.
The Director of the Financial Stability Department of Russia’s Central Bank, Elizaveta Danilova, told reporters that although there had been a significant and almost unprecedented increase in borrowing, it was not a cause for concern.
“We have a fairly stable situation with public finances,” she said. “From a macroeconomic point of view, we do not see any problems.”
According to the Accounts Chamber, fighting Covid-19 cost around 12.5 percent of the annual budget, equivalent to 2.9 trillion rubles (nearly $40 billion).
Earlier this year, a study by Russian economists found that the pandemic was the most significant blow to the country’s economy in recent years, overshadowing even the catastrophic downturns of 2008 and 2014.
The current financial crisis has affected nations across the world. In the UK, for example, which is still languishing in a tough country-wide lockdown with many businesses forced to shut, government borrowing has risen by £222 billion ($313 billion) to a total of £270 billion ($380 billion), putting the total debt at $2.1 trillion. In France, the national debt now tops $3.2 trillion and will soon exceed 120 percent of the French economy.
Last month Moscow dropped its city-wide curfew, allowing bars, restaurants, pubs and nightclubs to reopen to partygoers, as the mayor of the capital announced that the virus was on the retreat amid growing population immunity. The country has consistently recorded a decreasing number of positive tests, with only 11,679 cases detected on Tuesday.
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