MOSCOW, Aug 8, 2011 (AFP) - Russia, which has shown relatively low state debt in recent years, is envisaging a tripling of its public debt in the next three years amid sluggish growth and high spending, a report said on Monday.
The Vedomosti daily said that the government planned to borrow hundreds of billions of dollars, mainly on the domestic bond market, in the next years, bringing its public debt to 17 percent of gross domestic product by 2014.
The borrowing will help cover Russia's budget deficit, which will fall to 2.3 percent of GDP in 2014 after a predicted 2.7 percent in 2012 and 2013, it said, quoting an internal finance ministry document to be reviewed by the government this week.
Vedomosti said that Russia's state debt was 4.6 trillion rubles (112.3 billion euros, $161 billion) on July 1 but this would rise to 12 trillion rubles by 2014 with the new borrowing.
Of this, Russia would borrow 10 trillion rubles (244 billion euros, $350 billion) on the domestic market and 2 trillion rubles abroad, it said.
"The era of saving is over for Russia, now a new life is starting, one of borrowing, spending and ensuing budgetary risks," a finance ministry official told the newspaper.
Russia was able to build up tens of billions of dollars in reserve funds during the era of high oil prices, helping the country weather the global financial crisis of 2008.
But the finance ministry document warned that these funds will be almost completely depleted by 2013 if the price of oil is lower than 93 dollars a barrel in 2012.
Vedomosti quoted economists as saying that the expansionary policy could be unwise given the current uncertainty in the global economy caused by the problems in the budgets of the United States and some euro zone states.