Russia’s foreign debt fell by nearly 20% in 2023

The country’s liabilities have been steadily decreasing, according to the central bank

Russia’s government and businesses have been steadily reducing the amount of money they owe to foreign lenders, the latest official data suggests.

The country’s level of external debt dropped by nearly a fifth last year, reaching its lowest point in over a decade, its regulator Bank of Russia says in its annual report, which has just been made public.

The central bank reports in it that, as of January 1 this year, “the external debt of the Russian Federation amounted to $316.8 billion, having decreased by $68.2 billion, or by 17.7%, over the course of [2023].”

External debt is the portion of a country’s national debt borrowed by the state and by private businesses from overseas lenders such as banks, the IMF, foreign companies and other creditors.

The amount owed by Russia’s central bank and other banks remained virtually unchanged at $94.7 billion, while government debt was reduced by 29%, from $46.1 billion to $32.7 billion. Other sectors of the economy reduced their overall external debt by 22.6% to $189.4 billion, the report says.

The regulator also noted that the debt burden on the Russian economy has decreased as the ratio of external debt to GDP fell to 15.8% last year.

According to Bank of Russia, the current level of external debt is at its lowest in a decade.

President Vladimir Putin said in December that Russian companies were dutifully repaying all loans taken from foreign financial institutions, often ahead of schedule.

Russia’s foreign debt reached a historic high of over $700 billion in 2014. The liabilities began a relatively steady decline since then, due to Western sanctions imposed in 2014 over the Crimean reunification and to the withdrawal of capital by non-residents. The new sanctions campaign unleashed by the West against Moscow since 2022 has further accelerated foreign-debt decline.

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