cross-posted from: https://lemmy.sdf.org/post/37060739
Russia’s Finance Ministry is aggressively increasing its borrowing in a bid to cover growing fiscal gaps and hedge against an increasingly uncertain economic future as military spending surges and oil and gas revenues slump.
Six months into 2025, the ministry has already borrowed more than 2.7 trillion rubles (approximately $35 billion), or 56% of its annual borrowing plan.
This week alone, it raised 195 billion rubles (around $2.5 billion) through two new issues of government bonds, known as OFZs, hitting its second-quarter fundraising target of 1.3 trillion rubles (about $16.9 billion).
Russia is paying steep yields — 15.2% on six-year bonds and 15.5% on 11-year debt — amid high interest rates aimed at taming inflation.
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Foreign direct investment in Russia fell to just $3.3 billion in 2024, its lowest level since 2001, according to new data published by the United Nations Conference on Trade and Development (UNCTAD).
The data, released during Russia’s flagship St. Petersburg International Economic Forum, shows a 62.8% decline in investment between 2023 and 2024 and a 50% drop from the pre-war year of 2021, when Russia attracted $38.8 billion.
Even if the war were to end tomorrow, few serious businesses would consider Russia as an attractive investment destination given the political risks that would remain, Sergei Aleksashenko, a former deputy governor of the Russian Central Bank who now lives abroad, told Reuters.
According to the Central Bank itself, foreign investment in Russia’s non-financial sectors has declined by 57% over the past three years. Total accumulated FDI fell from $497.7 billion at the start of 2022 to $216 billion as of January 2025, the lowest level since 2009.
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