OREANDA-NEWSThe net public debt of Russia went into the negative zone for the first time since 2014 - the time of the first sanctions for Crimea and the beginning of the fall in oil prices. Since mid-2019, public debt in the broadest sense (internal and external debts of the federal government, debts of regions and municipalities) has become less than the liquid assets of the “expanded government” (federal authorities, regions and extrabudgetary state funds), the Russian media calculated based on data from the Ministry of Finance and Central Bank.

In other words, if Russia suddenly needed to pay off all its debts immediately, this could have been done at the expense of government deposits with the Central Bank and commercial banks. As of August 1, 2019, the expanded government's net assets (deposits minus debt obligations) amounted to 1.25% of the forecast GDP of 2019 (according to the Ministry of Economic Development). As of January 1, 2019, the public debt in the broad sense exceeded state assets by 1.5% of GDP.

Russia's lack of net debt reflects its uniqueness among the markets of developing countries, says Anton Pokatovich, chief analyst at BCS Premier. Sanctions and low oil prices forced the government to stockpile stocks for a rainy day and maintain tight debt discipline. “What has been done in the macroeconomics of Russia from 2014 to 2019 will definitely fall into the textbooks”, said Minister of Economic Development Maxim Oreshkin. But the flip side of such a tough approach is the lack 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 thereby partially solve the problem of slow growth.

There are few countries in the world where state financial assets, like Russia, exceed gross public debt. For example, the ratio of Turkish public debt to GDP in 2018 exceeded 30% - two times more than the Russian indicator, the expert notes. The price and rate of growth of the Russian economy have become the price paid for such a level of macroeconomic stability, he said.