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Russia will borrow more than planned in 2025, finance minister says
Published by Global Banking and Finance Review
Posted on September 9, 2025
3 min readLast updated: January 22, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on September 9, 2025
3 min readLast updated: January 22, 2026
Russia will increase borrowing in 2025 to manage its budget deficit, focusing on domestic investors due to sanctions and high interest rates.
MOSCOW (Reuters) -Russia will borrow more than planned this year to cover the rising budget deficit, Finance Minister Anton Siluanov was quoted as saying on Tuesday, though high interest rates, a strong rouble and a shallow capital market are limiting its capacity.
The Finance Ministry increased the deficit estimate for this year from the initial 0.5% of gross domestic product (GDP) to 1.7%. As military spending to finance the war in Ukraine continues, the deficit is set to exceed this figure.
"Is it possible to increase the debt? Yes, on one hand, we will do it this year. I want to say right away that it will be within reason. These will not be any large imbalances for the budget," Siluanov told RBC radio in an interview.
Russia's new draft budget should be submitted to parliament for review this month, and the planned spending volumes will be a significant factor in the central bank's decision on the key interest rate on September 12.
Russia planned to borrow 4.8 trillion roubles ($57.55 billion) in 2025 but is already close to this year's borrowing target, having raised 4.2 trillion so far. Hit with sanctions over the war in Ukraine, Russia is cut off from Western capital markets.
"We are now focusing on investors in our securities, exclusively domestic investors. There are no foreign investors," Siluanov said.
Russia has a debt-to-GDP level of around 15%, according to Siluanov, one of the lowest in the world. President Vladimir Putin has said the country has room to increase its budget deficit because of the low debt burden.
However, with the central bank's key interest rate at 18%, borrowing in the domestic market is expensive. Siluanov complained that servicing the state debt cost 8% of the overall budget expenses despite the low debt burden.
Yields on the government's five-year rouble bonds stood at 13.5%.
High interest rates mean debt servicing takes up a comparable share of Russia's budget to that in countries with much higher debt burdens. For example, Britain, with a 96% debt-to-GDP ratio, will spend 8.3% of its budget on debt servicing this fiscal year, according to its spending watchdog.
"If we continue to increase the debt, it will displace all other expenses. We will have less money left for our priorities," Siluanov said.
Siluanov flagged new state bond issuance for investors from countries that Russia considers 'friendly' but did not provide any details. The yuan is the most-traded foreign currency in Russia, and some firms issue yuan-denominated bonds on the internal market.
Negotiations over yuan sovereign bond issuance between Russia and China have lasted for over a decade but have made little progress, with Russia insisting that its own financial infrastructure should be used.
($1 = 83.4000 roubles)
(Writing by Gleb BryanskiEditing by Peter Graff)
The debt-to-GDP ratio is a measure of a country's public debt in relation to its gross domestic product, indicating the country's ability to pay back its debts.
Interest rates are the cost of borrowing money, expressed as a percentage of the amount borrowed, and they influence economic activity and inflation.
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