The Auditing Chamber of the Russian Federation (RIA Novosti/Dmitry Korobeinikov)
Every Russian citizen owes the equivalent of $4,200 after the country’s external debt skyrocketed to $215 billion during the last year, according to official data.
It appears that Russia is good at amassing not only its gold reserves, but also debts. The country’s external debt reached a new height of $215 billion in 2012, or 10.5% of country’s GDP, Russia’s Audits Chamber’s report says. Debt servicing in 2012 amounted to over $1 billion.
This amount is equal to what Russia spends on housing and public utilities, culture and filmmaking combined, according to the Audits Chamber’s Chairman Sergey Stepashin.
The Audits Chamber is concerned about the country’s corporate debt, with also grew significantly. By the end of 2012 the joint external debt reached $624 billion. This is 16.1% more than the country’s gold and foreign currency reserves.
In 2013 eleven companies with state participation will be subjected to a check on the effectiveness of their debt policies, according to an auditor at the Audits Chamber Nikolay Beskhmelnitsyn, Novaya Gazeta daily reports.
However, some experts believe the new corporate debt figures are not something to be afraid of.
“We could start to worry if the cumulative credit volume gets more than 80-100% of Russia’s GDP. But the current volume is 30%, it’s not much by international standards,” head of investment division at Solid company, Mikhail Korolyuk, told Novaya Gazeta.
The debt of $624 billion is insignificant for the scale of Russian economy, it’s less than 20% of GDP, believes analyst from Aforex Narek Avakyan.
“To compare, government foreign debt of Germany is around 65% of its GDP. China, which has over $3.5 trillion in gold and foreign currency reserves, has the debt of 22% of its GDP. In France this figure is more than 100%, and this is without corporate debts,” Avakyan told Novaya Gazeta.
The world’s leaders by external debt (the total public and private debt) are the European Union and the United States with over $16 trillion debt each. As of September 20, 2012, US Treasury said the debt reached $15.85 trillion. Russia currently occupies 20th place by the amount of debt.