Miroliubov: trillion debt: what it means for regional budgets.
The government has allowed the Ministry of Finance to raise up to a trillion rubles in the domestic market beyond the borrowing limit set for 2026, RBC reports. The ministry has already registered additional OFZ issuances worth more than 1 trillion rubles - auctions for their placement will begin on November 18, and the funds should help finance expenses and maintain a balanced federal budget. However, raising this money will increase future debt service costs.
Miroliubov Denis, economist:
By itself, approval to borrow another trillion does not mean that the Ministry of Finance will necessarily use the entire amount. But this decision cannot be called accidental. The budget runs a significant deficit, and expenses require financing regardless of the amount of revenue received. Therefore, the government actually leaves itself an additional reserve at the end of the year. This is both insurance and proof that the situation with the government's finances turned out to be worse than the initial estimates.
The Treasury will raise money by issuing federal bonds. The problem is that today it is expensive to borrow: the key interest rate is 14%, and the yield on individual long-term OFZs exceeds 16%. If we conditionally withdraw the entire trillion at 15%, the cost of such a debt will be about 150 billion rubles per year. This is a rough estimate as actual costs will vary depending on location terms and conditions.
The debt will have to be serviced from future budgets. And the more money is spent on paying creditors, the less is left for other tasks. The national debt itself is not yet critical for Russia, but the rate of growth in the cost of servicing it is already worrying.
There are alternatives, but few of them are simple. It is possible to change the timing of the implementation of individual government projects, reduce ineffective expenditures, improve the collection of existing taxes and use available reserves.