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.
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.
