INSUBCONTINENT EXCLUSIVE:
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
rates aimed at taming inflation.The Finance Ministry has prioritized fixed-rate bonds to avoid future increases in debt servicing costs,
even though they lock in high rates regardless of changes in monetary policy.When demand is low, the ministry resorts to issuing floaters,
or bonds with variable interest rates tied to the key rate, but it has grown wary of their growing share in the debt portfolio.The Finance
Ministry prefers to limit the use of floating-rate debt unless absolutely necessary, Deputy Finance Minister Vladimir Kolychev has
said.Conditions have recently turned more favorable for borrowing
12 phone call between Presidents Vladimir Putin and Donald Trump stirred fleeting hopes of peace in Ukraine, drawing risk-seeking investors
back into the Russian bond market.That momentum continued into March, as expectations of declining inflation and potential interest rate
cuts spurred additional demand.For now, the ministry is capitalizing on the window of opportunity.By front-loading its borrowing now, the
Finance Ministry is building a fiscal buffer in case markets turn against it later this year, analysts at Gazprombank said.Still, risks are
In May, the government approved an additional 826 billion rubles (around $10.7 billion) in spending, funded by expected windfalls in non-oil
But economic growth is slowing and inflation is cooling faster than anticipated, raising concerns that those revenues may not
materialize.The 2025 budget assumes inflation at 7.6%, but Economic Development Minister Maxim Reshetnikov said the forecast will be revised
downward in August.Analysts at MMI warn that government expenditures could exceed targets by 1.7 to 2.7 trillion rubles (roughly $22.1 to
$35.1 billion), pushing the deficit 2 to 3 trillion rubles ($26 to $39 billion) beyond current projections.The official deficit has already
tripled to 3.8 trillion rubles (about $49.4 billion), and by the end of May, it had reached 3.4 trillion (approximately $44.2 billion).The
The Finance Ministry has slashed its forecast by 2.6 trillion rubles (about $33.8 billion), citing lower global oil prices and a stronger
ruble.If revenues fall below the baseline level, the government plans to dip into the National Wealth Fund, with 447 billion rubles (roughly
shortfalls in oil and gas revenues caused by a stronger ruble should be covered through additional borrowing rather than tapping the wealth
flexible, Isakov said.The Economic Development Ministry projects an average exchange rate of 94.3 rubles to the dollar this year, rising to
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