STEVE CHIOTAKIS: Turns out the U.S. and Russia have a common foe now: Standard & Poor’s. After the U.S. had its credit rating downgraded by the rating agency, Russia wants to be upgraded.
From Moscow, Peter van Dyk reports on why Russia thinks its debt is undervalued.
PETER VAN DYK: Russia has long complained about its credit rating. Currently, the country is BBB, the second lowest investment grade and below the ratings of Ireland, Cyprus, and the Bahamas. Prime Minister Vladimir Putin calls it an outrage. The country did default on its debt in 1998. But now it has more than $500 billion in currency reserves and is running a budget surplus.
YAROSLAV LISSOVOLIK: Russia believes that it did the job to deserve a higher rating.
Yaroslav Lissovolik is chief economist with Deutsche Bank in Russia. He says its fiscal situation is better than the U.S. and many European countries. Russia’s public debt is just 10 percent of GDP.
LISSOVOLIK: Similar indicators, in countries such as Italy for example, would be of the order of nearly ten times higher.
But analysts don’t expect a change soon, especially with dependence on oil a concern, commitment to reform uncertain, and presidential elections due in March.
In Moscow, I’m Peter van Dyk for Marketplace.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.