Record reserves fully covers the debt of Russia, which for the first time since 2014 was negative

Net public debt of Russia for the first time since 2014 when it was introduced by the international sanctions over the annexation of Crimea and collapsed oil prices, turned negative

Moscow-Live.ru / Akishin Vyacheslav

As stressed by the Minister of economic development Maxim Oreshkin, «what is done in macroeconomics Russia from 2014 to 2019, just get in the books»

World Trade Organization / wikimedia.org

Net public debt of Russia for the first time since 2014 when it was introduced by the international sanctions over the annexation of Crimea and collapsed oil prices, turned negative.

On August 1, the amount of debt the Federal government, regions and municipalities, including state guarantees on loans to enterprises amounted to 16.2 trillion rubles. And liquid assets of the state — Federal authorities, regions and extra-budgetary state funds on the same date totaled 17.6 trillion rubles.

Thus, the national debt in the broadest sense since the mid 2019 was less than the liquid assets of the «extended government», according to RBC, citing data from the Ministry of Finance and the Central Bank. This was possible because of record reserves, completely covering the debt of the state. That is, if Russia needed a to immediately repay all existing debt, this could be done by only government agencies deposits in Central Bank and commercial banks.

As of August 1, 2019, the net assets of the enlarged government (deposits minus debt) amounted to 1.25% of GDP in 2019 (according to the Ministry of economic development). On January 1, 2019, the national debt expanded understanding exceeded assets by 1.5% of GDP.

As stressed by the Minister of economic development Maxim Oreshkin, «what is done in macroeconomics Russia from 2014 to 2019, just get in the textbooks.»

According to experts, the introduction of international sanctions and falling oil prices have forced the Russian government to accumulate reserves for a rainy day and to meet strict debt discipline. But the flip side of this rigid approach, the deficiency of fiscal incentives for economic development.

In 2017 Sberbank CIB analysts pointed out that Russia could increase its total debt by 50% without threatening financial stability and thus partially solve the problem of slow growth.

Previously RBC has already drawn attention to the sharp increase in government reserves in 2018, which continues to 2019. the Volume of currency and funds on Deposit sector of public administration in 2018 rose to a record 3.87 trillion rubles, equivalent to $56 billion, Almost 3.9 trillion increase in public deposits — a record for the time of the publication of these statistics (since 2012).

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