Russia's 2008 state debt to hit historical low

Armen Hareyan's picture

Russia's state debt in 2008 will total 8.5% of the gross domestic product (GDP) and will be the lowest in the country's history, the finance minister said Monday.

"The state debt [in 2008] will be the lowest in the history of the Russian Federation, totaling 8.5% of GDP," Alexei Kudrin said at a parliament session.

Kudrin said debt to GDP ratio was considerably higher in other countries, totaling about 60% in the United States and 100% in Italy.

The Russian government is seeking to replace funds raised on world capital markets with domestic borrowing to provide guarantees for investment in Russia, Kudrin said.

The finance ministry earlier said the proportion of foreign debt in Russia's state liabilities would fall to 53.5% in 2007, to 47.2% in 2008, and to 42.6% in 2009.

Inflation in Russia will stay within the projected range of 7.0-8.0% in 2007 but higher world oil prices or larger capital inflow could generate the risks of the ruble's appreciation by 1-2% above targets, Kudrin said.

The finance minister said that in its monetary policy guidelines Russia's Central Bank outlined the ruble's appreciation within the range of 0-10% in the next three years, adding that the national currency had gained about 4% against the dollar/euro basket since the beginning of 2007.

Russia's federal budget posted a surplus of an estimated 539 billion rubles (about $21 billion) in January-April 2007, the finance minister said. - RIA Novosti

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