Strong GDP Growth To Sustain Rising External Debt

We have revised our long-term forecasts for Russian external debt, taking into account figures for end-2007 and new growth expectations for the private sector. While public sector external debt is forecast to continue its downward trend, falling to just 1.5% of GDP by 2012, continued robust economic growth and increased access to global capital markets will contribute to a marked increase in private sector external debt to 45.1% of GDP over the same period. We believe that this is a sustainable trend, which poses limited threats to the country's macroeconomic stability.

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