Public debt
The rule of distribution of oil and gas revenues, which is being brought back
into the budget planning process, seeks to reduce the state budget’ s susceptibility to
volatile oil price fluctuations. The new elements of a more conservative financial
policy, such as the legislatively imposed state expenditure limit and the “automatic”
accumulation of a portion of oil and gas revenues in the sovereign funds, will allow
in the medium term for an increased sustainability of the budget system, a moderate
federal budget deficit in 2013 and 2014 and a balanced budget in 2015. Federal
government borrowings in the capital markets will be the main source of financing
the federal budget deficit. The volume of prospective issuance of public securities
primarily in the domestic bond market may equal up to RUB 1.2 trillion per annum.
Raising debt capital in the markets on acceptable terms and conditions and in
the required amount will be challenging. In this context, continuing to prioritise
development of the domestic debt market is considered to be the most important
goal of public debt policy in the medium term. It is necessary to complete the
initiated reforms aimed at market liberalization and modernization of its
infrastructure. The key objectives in this regard remain the expansion of the investor
base and the development of user-friendly and competitive conditions for market
participants.
The public debt policy in 2013-2015 will be focused on funding the federal
budget deficit by means of issuance in the domestic and international capital
markets on favorable terms, ensuring an optimal balance between yields and
duration of sovereign debt obligations, maintaining Russia’s credit ratings at a high
level, and establishing adequate market benchmarks for Russian corporate
borrowers. At the same time, the policy will look to enhance the system of
monitoring the corporate sector’s external borrowings and the mechanism of
granting state guarantees.
