It is time for the Government to take foreign loans as a means of replenishing the budget, since the state privatization plans are still uncertain, financial experts at RANEPA Sergey Hestanov and Vasily Yakimkin said, commenting on the intention of the Cabinet to increase foreign borrowings this year.
Earlier today several media outlets reported about the government’s intentions to borrow money abroad.
‘‘Despite the ongoing discussion [of the matter] neither the conditions, nor the dates for the placement of Eurobonds are known yet. Everything depends on a number of factors such as investors’ demand and oil prices,’’ he said. Konstantin Vyshkovsky, Director of the Department of State Debt and Financial Assets of the Russian Finance Ministry, spoke about the readiness to place sovereign Eurobonds three days ago. According to Sergey Hestanov, now is the time to borrow money abroad.
"The terms are really attractive: the level of interest rates is at a very low level and the liquidity in the international money market is high enough. If there are no problems related to the sanctions, the moment for a loan looks favorable enough. Another matter how it is strategically justified. Is it worth borrowing money to finance the budget deficit, when the economy shows no growth,’’ he noted.
According to him, it is impossible to predict a necessary amount of money. "Officially, we have a budget deficit of 3.3%, but this figure is constantly changing due to the price of oil. In addition, a foreign loan is not the only source for financing of the budget deficit. The sanctions make it difficult to predict the amount of possible investments; thus, the situation can be assessed only post factum,’’ Hestanov added.
In conclusion the expert reminded that in addition to privatization and loan, the government has another good tool for filling the budget – taxes.