Russia has very low debt to GDP ratio. Most of its external debt is private.

As the crisis unfolds in Russia it is rather interesting to note that of the leading issuers of sovereign national debt Russia has among the lowest ratios in the world . Its debt to GDP ratio is just under 12 %. The World Bank lists its central government debt to GDP ratio based on central government debt minus equity and financial derivatives held by the government as 9.4 %. Look at this ratio in comparison with a number of other sovereigns:
Russia 9.4 %
Switzerland 24.3 %
Sweden 35.3 %
Denmark 47.2%
Finland 51%
Canada 51.9%
Germany 55.2%
Spain 65.9%
Belgium 89.4%
U.S. 96.1%
U.K. 97.2%
France 100.9 %
Italy 126 %
Japan 196 %

Source: The World Bank

Furthermore because of its oil exports its been running a trade surplus not a deficit. So with stats like this why has the ruble fallen so dramatically? Clearly falling oil prices and perhaps also sanctions can explain it. In fact, over the past two days while it has recovered from its low point and is now trading at about 61 to the dollar, still down by close to 25 % . But the currency speculators may well have oversold the currency. On the other hand we know that markets never behave totally rationally and overshooting in a panic sale is a rather common phenomenon. It may well be that too many Russian business people have speculated in overseas investments and real estate but its not clear why this alone could severely damage the Russian economy given that the total ratio of the external debt to the GDP is 9 %;external debt service compared to exports 32 %; international reserves to external debt ratio 253 % and value in $ of per capita debt $5072 . (Source : The Bank of Russia . the total debt includes the external debt of the central bank, the banks and other sectors) We shall see what develops over the coming weeks both in oil prices and exchange rates. Gas prices in Montreal are now 1.09 a litre.


About haroldchorneyeconomist

I am Professor of political economy at Concordia university in Montréal, Québec, Canada. I received my B.A.Hons (econ.&poli sci) from the University of Manitoba. I also completed my M.A. degree in economics there. Went on to spend two years at the London School of Economics as a Ph.D. student in economics and then completed my Ph.D. in political economy at the University of Toronto. Was named a John W.Dafoe fellow, a CMHC fellow and a Canada Council fellow. I also was named a Woodrow Wilson fellow in 1968 after completing my first class honours undergraduate degree. Worked as an economist in the area of education, labour economics and as the senior economist with the Manitoba Housing and Renewal Corporation for the Government of Manitoba from 1972 to 1978. I also have worked as an economic consultant for MDT socio-economic consultants and have been consulted on urban planning, health policy, linguistic duality and public sector finance questions by the governments of Manitoba, Saskatchewan,the cities of Regina and Saskatoon, Ontario and the Federal government of Canada. I have also been consulted by senior leaders of the British Labour party, MPs from the Progressive Conservative party, the Liberal party and the New Democrats on economic policy questions. Members of the Government of France under the Presidency of Francois Mitterand discussed my work on public sector deficits. I have also run for elected office at the municipal level. I first began to write about quantitative easing as a useful policy option during the early 1980s.
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