Headlines
Russia's state debt-servicing costs will rise by 23% in 2026
Published by Global Banking and Finance Review
Posted on September 25, 2025
2 min readLast updated: January 21, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on September 25, 2025
2 min readLast updated: January 21, 2026
Russia's debt servicing costs are set to rise by 22.5% in 2026, reaching 8.8% of budget expenses due to increased borrowing and high interest rates.
MOSCOW (Reuters) -Russia's debt-servicing costs will rise by 22.5% in 2026 from this year, reaching 8.8% of the total budget expenses, due to an increase in borrowing and high interest rates, Finance Ministry documents showed on Thursday.
The government approved a three-year draft budget on September 24 with a rise in the value-added tax in 2026 to boost revenues and an increase of the deficit estimate for 2025 to 2.6% of GDP from the previous 1.7%.
Russia's level of debt is expected to be low at 18.6% of GDP in 2026 and 19% in 2027, but the costs of debt servicing in total expenses are predicted to double in 2026 from 4.4% of total expenses in 2021, before the start of military operations in Ukraine.
The central bank's key interest rate is 17%, down from its peak level of 21% earlier this year, and the central bank expects the key rate to average at 12%-13% next year.
Finance Minister Anton Siluanov said on September 9 that Russia will borrow more than planned this year to cover the rising budget deficit. Yields on the government's five-year rouble bonds are around 14%.
High interest rates mean debt servicing takes up a comparable share of Russia's budget to that in countries with much higher debt burdens.
(Reporting by Darya Korsunskaya; Writing by Gleb Bryanski; editing by Barbara Lewis)
Debt servicing refers to the cash required to cover the repayment of interest and principal on a debt for a particular period.
Gross Domestic Product (GDP) is the total monetary value of all goods and services produced within a country's borders in a specific time period.
Interest rates are the amount charged by lenders to borrowers for the use of money, expressed as a percentage of the principal.
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