UK defense ministry: Russia's record debt issuance indicates expectation of fiscal instability
Russia conducted the largest ever debt issuance in a single day, raising $13.6 billion in RUB equivalent on 16 Nov., the U.K. Defense Ministry pointed out in its intelligence update on Nov. 19.
“Russia’s declared ‘national defense’ spending for 2023 is planned at approximately RUB 5 trillion ($84 billion), a more than 40% increase on the preliminary 2023 budget announced in 2021,” reads the report. Russian defense spending has increased significantly since its full-scale invasion of Ukraine started in February.
"Debt issuance is expensive during periods of uncertainty," the UK defense ministry said.
The size of this auction highly likely indicates that Russia’s Finance Ministry “perceives current conditions as relatively favorable but is anticipating an increasingly uncertain fiscal environment over the next year,” the ministry added.
Russia's Central Bank said in August that the country’s budget surplus has tripled compared to the same period in 2021 due to high energy prices and a sharp decline in the country's imports due to Western sanctions.
