The amount of debt owed by the Russian state and private companies to foreign financial institutions has dropped below $300 billion for the first time since 2006, the Bank of Russia reported on Friday.
As of October 1, foreign liabilities amounted to $293.4 billion, having decreased by $24.5 billion, or 7.7%, since the beginning of 2024, according to a statement issued by the central bank.
External debt is the portion of a country’s national debt borrowed by the state and private businesses from overseas lenders such as banks, the IMF, foreign companies and other creditors.
“The dynamics were influenced by the reduction in other sectors’ liabilities mainly on raised loans, including within the framework of direct investment relations,” the regulator’s statement reads.
Its data shows that in the third quarter, foreign debt dropped by $8.5 billion, or by almost 3%, mainly due to a decline in liabilities of the economy’s real sector.
In addition, the public sector also reduced its external liabilities, by $1.3 billion, or by 4.2% per quarter. The volume of this sector’s debt amounted to just under $31 billion, a minimum since the end of 2015.
In contrast, the central bank and credit institutions increased their debt abroad by almost $4 billion, or by 4.1% in the July-to-September period, to a two-year maximum of $101.5 billion, according to the report.
Russia’s foreign debt reached a historic high of over $700 billion in 2014. The liabilities have been steadily declining since, in particular due to Western sanctions imposed that year over the Crimean reunification and a subsequent withdrawal of capital by non-residents. The new sanctions campaign unleashed by the West against Moscow since 2022 has further accelerated foreign-debt decline.
The country’s foreign ministry said last month the national debt remains at an “economically safe” level of below 20% of GDP, placing Russia among the countries with the lowest level of state arrears.
By comparison, the UK’s national debt recently hit 100% of the country’s annual economic output. State debt in the US exceeds 120% of GDP, while, in Japan, it stands at a record 260%.