Russia projects public debt below 25% of GDP through 2029

Yesterday 15:39

By: Azzat Manal

Russia projects public debt below 25% of GDP through 2029

Russia’s public debt is projected to remain below 25% of gross domestic product through 2029 under the government’s draft three-year budget, according to the fiscal plans submitted to the State Duma. The figures point to a gradual increase in the debt ratio as Moscow plans to maintain high levels of public spending while managing persistent budget deficits.

The draft estimates public debt at 21.7% of GDP in 2027, rising to 23.2% in 2028 and 24.1% in 2029. The ratio is expected to remain below 20% of GDP in 2026, according to the budget projections cited in the government’s fiscal planning documents.

The government submitted the federal budget bill for 2027 and the planning period of 2028 and 2029 to the State Duma on October 1. The proposal forecasts federal revenues of 43.3 trillion rubles and expenditure of 48.8 trillion rubles in 2027. For 2028, spending is projected at 50.9 trillion rubles against revenues of 45.8 trillion, while 2029 expenditure is set at 53.9 trillion rubles and revenues at 48.6 trillion.

The resulting deficits are expected to stand at 5.5 trillion rubles in 2027, 5.1 trillion in 2028 and 5.3 trillion in 2029. The Finance Ministry has put the 2027 deficit at around 2.2% of GDP, with the government aiming to bring the structural primary budget balance to zero by 2029.

The budget framework is based on an economic growth forecast of 1.4% in 2027, with growth expected to accelerate gradually to 2.4% by 2029. The government has also based its fiscal calculations on a benchmark Urals oil price of $50 per barrel for the coming three-year period, a key assumption for a major energy-producing economy.

Russia’s fiscal planning comes amid continued pressure from the prolonged war in Ukraine and weaker economic growth. Reuters reported in September that Moscow was preparing a series of tax increases for 2027-2029 as the government seeks additional revenue to finance rising expenditures, including military spending. The government’s 2027 budget proposal also envisages a higher deficit than earlier projections.

Despite the projected rise in the debt-to-GDP ratio, the government’s three-year framework aims to keep borrowing within the limits set by its fiscal policy. The Finance Ministry has said the budget is designed to remain resilient under different economic scenarios, with stronger oil revenues potentially allowing additional transfers to the National Wealth Fund.

The debt trajectory will nevertheless depend on several factors, including economic growth, oil and gas revenues, borrowing costs and the evolution of government spending. The final figures could change during the parliamentary process before the budget is formally adopted.